Annual report and accounts 2019/20
Lincolnshire Community Health Services NHS Trust | Annual Report and Accounts 2019/20
Page 2 of 68 Lincolnshire Community Health Services NHS Trust | Annual Report and Accounts 2019/20
Contents
Page 5 Introduction
Welcome from the Chair 5 Trust purpose 5 Our activities 6 Our work 7 About the Trust 7 Our strategic aims and objectives 8 The LCHS way 8
Page 9 Performance report
Overview 9 A statement from the chief executive 9 Financial performance 13 Service developments in 2019/20 13 Summary of LCHS structure and the services provided 15 Challenges for Lincolnshire health and care service 19 The Lincolnshire health and care system 19 Brexit 20 Key issues and risks to achieving LCHS’ objective 21 Single Oversight Framework (SOF) 24 Quality account performance 24 Quality priorities and achievement 25 Quality summary of performance 25 Performance summary 27
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Contents continued
Page 28 Accountability report
Corporate governance report 28 Directors’ report 28 Composition of the Board of Directors 28 Register of directors’ interests 30 Statement of the chief executive’s responsibilities as the 33 accountable officer of the trust Annual Governance Statement 34 Review of effectiveness 46
Page 47 Remuneration and staff report
Board members and senior management remuneration 47 Relationship between the remuneration report and exit 52 packages, severance payments and off-payroll engagements disclosures Staff report 54 Schedule of information 57 Employee matters 58
Page 68 Financial statements 68
Page 4 of 68 IntroductionLincolnshire Community Health Services NHS Trust | Annual Report and Accounts 2019/20
Trust Purpose Elaine Baylis | Trust Board Chair Lincolnshire Community Health Service NHS Trust provides a wide Welcome to the Annual Report and Accounts for range of community care across Lincolnshire meeting the physical Lincolnshire Community Health Services NHS health needs of our community as close to their homes as possible. Trust (LCHS). The Lincolnshire Health System is undergoing significant change meeting the direction of the NHS Long Term Plan and local This year our growth has been in building partnerships and new population health needs. This provides the opportunity to make relationships to deliver improved services for the population of positive changes to healthcare in Lincolnshire which ensures care Lincolnshire. As this introduction is being written the world is in the is close to home and acute care is focussed on those people in midst of a global Covid-19 pandemic that has changed the lives of most need. everyone and seen the NHS given new prominence in the country. This means a real focus on renewed and refreshed pathways of
care developed with partners in the local healthcare system. It From the weekly round of applause for key workers; to the fantastic means working in on population health needs locally in partnership vision of Captain Tom Moore’s 100th Birthday Walk for the NHS in with GP practices and their overarching primary care networks an effort to raise £1,000. Indeed, such is the esteem the NHS is (PCNs). It means supporting patients to manage their own care seen in that Captain Tom Moore’s fundraising has raised £32m needs and supporting them to look after themselves, which means million at the time of writing. that they will get better quicker with great outcomes.
The Covid-19 pandemic has galvanised the health and care providers in Lincolnshire and LCHS has played its part in working with these partners to discharge patients from the acute hospitals and also in transferring staff to help in critical care settings within those hospitals. Page 5 of 68 Lincolnshire Community Health Services NHS Trust | Annual Report and Accounts 2019/20
Our activities
Working in this way means we will continue to deliver the safe, The Trust has a wide portfolio of healthcare services that includes: effective and efficient evidence based care that resulted in our • children’s and young people’s services including looked after ‘Outstanding CQC’ rating. We will need to continue to shape our children and children’s therapy services services so they are flexible to any emerging priorities and able to • electronic assistive technology service (EATS) take on new opportunities as healthcare is positioned in the best • general and specialist integrated community nursing place for patients, in the community. • immunisation and vaccination services • inpatient beds and outpatient clinics in four community hospitals
Our Trust is well placed to help deliver the changes and together • minor injuries unit with partners we are already seeing improvements that benefit • musculoskeletal (MSK) physiotherapy services patients and make better use of the funding available. • occupational therapy, physiotherapy and speech and language therapy
• podiatry service There is no secret to give great healthcare to our communities • primary care services in Boston and Spalding within the funding we are given. It relies on our great workforce, • safeguarding services for both children and adults. service users being heavily involved in their own care and working • sexual health and contraceptive health services in partnership to deliver improvements that we all recognise as • urgent care services including Urgent Treatment Centres at good. Louth, Skegness, Lincoln, Boston and Peterborough
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Our work
The Trust has the expertise in a wide range of community services – delivered through our 1,780 (1,572 WTE) committed staff – they support and improve the wellbeing of people in Lincolnshire and parts of Peterborough. This expertise in healthcare is broad and supports all aspects of community care representing a range of professions including nurses, allied health professionals, public health professionals and GPs. These NHS-trained staff are being shared, rotated and deployed across the NHS system to where they are required.
This crucial resource not only provides high quality clinical care and expertise, but also coordinates, connects and advocates for About the Trust patients & carers. This includes core areas such as: The Trust delivers care across the whole of Lincolnshire and parts of Peterborough. The Trust covers four Commissioning Groups • Leading integration opportunities (CCGs) and Lincolnshire County Council. • Supporting people with long term conditions • Frailty and end of life care Our services are delivered from over 64 different sites; some of our • Urgent care main sites are: Head Office – Beech House, Witham Park, Lincoln • Specialist in prevention, case management, risk County Hospital, Louth John Coupland Hospital, Gainsborough management and appropriate discharge Johnson Community Hospital, Spalding Bourne Health Clinic Riversdale Health Clinic, Sleaford Lindon House, Lincoln Details of our services are accessible on our website. Page 7 of 68 Lincolnshire Community Health Services NHS Trust | Annual Report and Accounts 2019/20
Our strategic aims and objectives The LCHS Way
The LCHS Way is “we listen, we care, we act, we improve”
We listen: we engage with everyone we work with | we are united | we are always positive
We care: everyone is valued, respected and developed | knowledge and skills are nurtured | success is celebrated
We act: Clear goals and the right resources | freedom coupled with accountability | emphasis on simplicity
We Improve: we are creative, resourceful and innovative | integration & collaboration is the way forward | we’re always striving to do better
Page 8 of 68 Lincolnshire Community Health Services NHS Trust | Annual Report and Accounts 2019/20 Performance Overview A statement from the chief executive providing her perspective on the performance of LCHS during 2019/20
Maz Fosh | Chief Executive Lincolnshire Community Health Services NHS Trust
We are Lincolnshire Community Health Services NHS Trust (LCHS), the primary community healthcare provider in Lincolnshire delivering community-based services.
In partnership with other health and social care services we care for thousands of patients across Lincolnshire every day delivering joined-up care in a range of community settings appropriate to the needs of the patient including: patients’ homes or a place of residence they call home, including nursing and care homes; GP surgeries; community clinics; hospices; homes providing community transitional care beds; community hospitals; and within acute hospital settings. This puts us at the heart of the Lincolnshire healthcare economy.
Our mission is to provide outstanding community care. By providing services aimed at preventing health problems from getting worse,
Page 9 of 68 Lincolnshire Community Health Services NHS Trust | Annual Report and Accounts 2019/20 we help to support a shift from care in acute hospitals into more and the public called ‘Healthy Conversation’. This has helped LCHS joined-up care close to the patient’s home. to understand our patients, staff and stakeholders, their LCHS has an annual turnover of c. £108m and employs c. 1,900 experiences and how they would like to see services continue and members of staff. After being rated an ‘Outstanding’ organisation improve. Through a series of workshops, community engagement overall by the Care Quality Commission (CQC) following our last events, and social media channels the things we heard include that inspection in June 2018, all of our people have worked incredibly people want support to manage their own health conditions hard to maintain and build on this achievement and make sure this proactively and acknowledge that seeing a doctor is not always the translates into ‘great care close to home’ for the people of best option. Lincolnshire. It is also important to us that we understand what our partners think Our work also contributes directly to tackling national challenges of us. In October 2019 we undertook our first large-scale including: stakeholder survey. We asked almost 200 of our partners a range reducing unnecessary A&E attendances and admissions of questions about the service we provide, our leadership and what through our Clinical Assessment Service which has directly it is like to work with us. We received 44 responses from our contributed to A&E contacts reducing against the national voluntary sector, primary care and our commissioning health and trend of flat-lining or deterioration; care partners; a return rate of 22% compared to the national increasing access to e-consultations and e-prescribing which average 10-15% for external surveys. The majority of feedback was is improving patient access, quality and choice; positive, however, as a learning organisation we are committed to integrating with primary care to remove barriers between improving in all areas including those where we were rated highly. services for patients. Some of the areas we particularly want to improve are the way we communicate and engage with partners around changes we plan to Patients are at the heart of everything we do and it is important that make to services and collaboration with our primary care and they are involved not just in decisions about their care, but also in voluntary sector partners. We plan to make much more use of decisions that shape the current and future health services in digital opportunities, undertake focus groups to further understand Lincolnshire. In 2019/20, LCHS played an active role in a system- how we can work more effectively with our partners and to take a wide programme of engagement with the patients, stakeholders
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‘temperature check’ between surveys as well as repeating the April 2019 to ensure its c.18,000 patients continued to have access survey every two years to monitor our progress. to primary care services and care.
Our people remain our most valuable asset. We believe that The majority of services the trust delivers serve the population of focusing on our workforce directly leads to better care for patients. Lincolnshire. We also provide Urgent Treatment Centre services in The national annual staff survey is an opportunity to listen to the Peterborough, augmentative and alternative communication views of our employees; to recognise, celebrate and promote what services across the East Midlands which provide strategies and is going well and respond to what they tell us could be better. tools to help people with communication difficulties to communicate as effectively as possible. In 2019/20 we achieved a return rate of 71%. This is the highest in LCHS history, is 16% higher than the previous year and is the highest in England when benchmarked against 16 other community trusts. This means that we are listening to more of our people than ever and enables our leaders to start great conversations with their teams about the quality of care they feel they can provide; their health, wellbeing and morale; the quality of the leadership they receive; and, how included and safe they feel.
While community care continues to be the Trust’s main business in May 2019 LCHS secured the contract to run the GP Centre at Spalding Hospital from 1 April 2020 for two years (with a potential extension of up to four years). LCHS had been temporarily managing the practice in September 2018 on behalf of South Lincolnshire CCG to maintain primary care services for its 3,000 patients following the departure of the practice’s lead GP. LCHS also started to manage The Sidings Medical Practice in Boston in
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Some of the Trust’s key facts and figures are illustrated below
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LCHS continues to perform well in a challenging operating or hospital and opens up the potential to work in settings environment. In addition to maintaining and building on our including the home, nursery, school and clinics. In 2019 the Outstanding CQC rating the Trust was able to deliver its services project team won the LCHS’ Innovation Award and received within its budget including delivering a modest planned surplus. ‘high commended’ in the Early Adopter category for Leading Healthcare 2020. Financial performance • Urgent Treatment Centres (UTCs): In their review of urgent LCHS has a legal and moral obligation to manage the money it care services NHS England found that the public was confused receives from the public purse each year and deliver quality by the array of different services which operated under the healthcare services that represent good value for money. Although umbrella term of ‘urgent care’. To end this confusion, NHS the Trust continued to deliver a strong financial performance, LCHS England standardised provision by setting 27 core standards for operates within the Lincolnshire healthcare system and the system UTCs including providing a mix of bookable and walk in as a whole faces significant financial pressures. appointments and standard operation hours. LCHS led the development and implementation of four UTCs across During 2019/20 LCHS posted a year-end financial surplus of £3.3m, Lincolnshire and delivered these changes within the NHS £0.4m higher than the planned surplus of £2.9m. Within the outturn England target date of December 2019. position the Trust has received Provider Sustainability Funding (PSF) income of £2.0m (planned allocation). • Children’s physiotherapy rapid response service: The service is for children with complex physical disabilities living in Service developments in 2019/20 Lincolnshire to help prevent hospital admissions for acute chest infections. In 2019/20 the service won two awards for its impact • E-consultations: Working in collaboration with a private on improving outcomes: the Balancing Quality and Finance partner, Q Doctor, LCHS has developed a video consultation Award at Celebrating Success and Clinical Team of the Year at platform that enables us to deliver advice and care to our the Lincolnshire Live Health Awards 2019. Shortlisted in the patients in urgent care, community nursing, specialist nursing, national Advancing Healthcare Awards UK 2020 award for therapy services and primary care through technology. The Evaluating Health and Social Care (pending final results). platform reduces the need for patients to travel to a care setting
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• First Contact Practitioners (FCPs): As part of its commitment whilst promoting an ethos of self-care and personalisation to to system working, LCHS has deployed a number of FCPs in support people to manage their own conditions and enable the GP surgeries. FCPs are highly experienced and skilled most vulnerable to remain at home longer where it is safe to do physiotherapists who provide an assessment and advice to so. patients presenting at their GP surgery with musculoskeletal complaints rather than seeing a GP.
Occupational Therapy in Primary Care LCHS have worked together with Neighbourhood Leads, Health Education England and the University of Lincoln to look at the role of Occupational Therapists and role-emerging student placements in a GP setting across the Grantham and Lincoln South Neighbourhoods. These roles have demonstrated the value of having Occupational Therapists working proactively with GPs and social prescribers as part of Neighbourhood Teams to maximise individuals potential and wellbeing to live well at home, reducing the need for multiple service intervention and potential hospital admissions.
Community Nursing Transformation Programme: Community Nursing is a core and essential service provided by LCHS for the people of Lincolnshire. Following a detailed review of this service a programme of work has begun to transform the way in which community nursing services are providing care to meet the changing needs of the people of Lincolnshire. It will continue to provide high quality nursing care
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Summary of LCHS structure and the services Nursing, AHP and operations: The six service lines provided Community Nursing The Trust is managed through five organisational directorates: • The community nursing service for adults are organised into 12 Chief Executive’s Office Community Teams aligned to Primary Care Networks. Nursing, Allied Health Professionals (AHP) and Operations • Community nursing teams work closely with a range of services Medical Directorate across LCHS including Allied Health Professions and Specialist People and Innovation Directorate Services, to provide support to people with long term conditions, Finance and Business Intelligence Directorate people who are frail, and those at the end of life. Community The corporate services directorates, which consist of the Chief nurses also work closely with a range of professionals from other Executive’s Office, People and Innovation and the Finance and agencies including Primary Care as part of Neighbourhood Business Intelligence Directorates, manage the day to day business Teams to provide integrated care for patients designed to meet of LCHS. These directorates also support the work of the Nursing, local needs. AHP and Operations Directorate and the Medical Directorate to ensure delivery of high quality, effective and efficient services. Primary Care: • Working with our Primary Care Network partners across Chief Executive’s Office Lincolnshire to realign our community services to deliver more This directorate manages the corporate business services of LCHS. joined up services. Functions include Trust Board, development, logistics and support, • Employing First Contact Physiotherapists in GP surgeries to help corporate assurance and governance, compliance and legal patients to with musculoskeletal problems to see the right person services, registrations and membership with regulating bodies, at the right time. complaints management, the Patient Advice and Liaison Service • (PALS), communications and engagement and freedom of LCHS holds the contract for or manages a number of General information. Practices across Lincolnshire.
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Allied Health Professionals (AHPs) and Children’s Services Community Hospitals and Transitional Care • AHPs use a holistic approach to assess, treat, diagnose and manage a range of conditions in adults and children across • LCHS has four community hospitals; County Hospital, community settings. The focus is on prevention and Louth, John Coupland Hospital in Gainsborough, Johnson improvement of health and wellbeing to maximise the potential Community Hospital in Spalding and Skegness Hospital. for individuals to live full and active lives. We also deliver care within the Butterfly Hospice in Boston. • Adult Services are: Occupational Therapy, Physiotherapy, • Community Hospitals & Transitional Care provide a critical Speech and Language Therapy, Podiatry and the Lincolnshire role across services and system providers to ensure that Stroke Service. home first principles are proactively viewed as the starting
position and not the end point. Specialist Services • The service provides an essential function in supporting the • Services provide care closer to home to reduce hospital emerging Neighbourhood Team models of care to achieve admissions and manage long term conditions through self-care. admission avoidance and reduce acute Delayed Transfer • The Specialist Services are: Diabetes; Heart Failure; of Care (DToC). Respiratory; Pulmonary Rehab; Macmillan; TB; Tissue Viability; • Bridging the gap between hospital and home maximises INR; Continence; Lymphedema; Parkinson’s; and MSK recovery and promotes independence with an emphasis on Physiotherapy. ‘Home First’ through time-limited rehabilitation and support • We provide countywide integrated sexual health and for older people and adults with long term conditions. contraceptive health services • The Operations Centre supports the system with referral • The Electronic Assistive Technology Service provides a handling and demand/capacity management to ensure the specialist service across the East Midlands including right care, first time. Nottinghamshire, Derbyshire, Leicestershire, Lincolnshire, Northamptonshire and Milton Keynes.
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Urgent Care Urgent care is delivered through urgent treatment centers, walk in centers and an extended range of provision including an; telephone clinical assessment/triage, home visiting and face-to-face consultation. Home visiting is also available for patients meeting the criteria.
The services provide care to patients with a range of injury and illness related conditions.
Integrated Urgent Care in Lincolnshire The service offer for LCHS Urgent Care is delivered as: • Clinical Assessment Service - definitive clinical assessment by telephone. • Building Based Urgent Care - face-to-face patient consultation – Within Urgent Treatment Centres /GP Out of Hours (OOH) provision / Acute Primary Care/ Integrated Primary Care GP Hubs. • Mobile Urgent Care - face-to-face patient consultation in the patient’s own home - GP OOH provision / Acute Primary Care.
LCHS delivers a 24/7 integrated urgent care service that ensures people receive the right care, from the right person, in the right place, at the right time.
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Medical Directorate All directorates work together to deliver the trust’s aims and The Medical Directorate is leading work to develop and implement objectives, each reporting to the Trust Board through a dedicated a new medical model including recruiting GPs, upskilling existing executive director. staff into new Advanced Clinical Practitioner roles, and developing a medical leadership structure to create a more consistent and In March 2020 LCHS published a suite of five year strategies resilient medical workforce. setting out clear intentions and planned activities for 2020-2025 to enable great care, close to home. People and innovation Directorate People and Innovation recognise the value brought to the trust by Clinical Strategy its people and the link that exists between an engaged, happy People Strategy workforce who feel valued and the quality and efficiency of the care Estates Strategy they are able to deliver. Digital Health Strategy Finance and Business Intelligence Strategy People and Innovation provide expertise and leadership in the areas of human resources, organisational development, learning and development, transformation, digital health and innovation, estates alignment and health and safety.
Finance and Business Intelligence Directorate The directorate brings together elements within the organisation including commercial engagement, financial management, financial accounting, contracting, performance and information as well as strategy and planning.
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Challenges for Lincolnshire health and care The Lincolnshire health and care system services National healthcare policy for the next 10 years is outlined in the Lincolnshire has a number of challenges that impact on the delivery NHS Long Term Plan, published in January 2019. In 2019/20 the of health and care services across the county. then seven (now four) main NHS commissioning and provider organisations in Lincolnshire committed to implementing national • Lincolnshire has a higher proportion of adults over the age of priorities for the benefit of the Lincolnshire population through the 5- 75 and this number is expected to double over the next 20 year Lincolnshire Long Term Plan. This was signed by system years. leaders in November 2019. • The prevalence of cancer is in the upper quartile nationally.
Smoking, obesity and physical inactivity rates are all LCHS is fully aligned to its direction and our Operational Plan for significantly worse than nationally. The rate of early deaths 2020/21 will support the delivery of system change and from cardiovascular diseases is worse than average. improvement. The purpose and ambition of the Lincolnshire NHS • Lincolnshire has one of the fastest growing rates of carers in and the agreed healthcare priorities for the next five years are: the UK.
• Urban areas and the coast suffer higher than average levels Supporting everyone in Lincolnshire to: of deprivation. Delivering care to 0.75m people dispersed across the city, Start Well, Live Well and Die Well through supporting: development market towns, rural and coastal areas over 5,921 square before starting school; help in navigating the transition to adulthood; kilometres 24 hours a day 7 days a week with poor local healthy lifestyles; urgent help to deal with accidents or acute illness; infrastructure is challenging, particularly for community working together to manage long term conditions; those who are services. dying and the people who are close to them. • The interface between GPs and other services is still being defined. Lincolnshire’s four core ambitions for starting, living and • Low digital literacy, particularly on the east coast, presents a dying well are:
potential barrier to digital transformation. 1. shifting the emphasis to prevention and self-care;
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2. ensuring people have choice and control over the way their For staff: Build capacity to care through better supporting and care is planned and delivered; developing staff; making the most of the expertise, capacity and 3. working together across services to better meet people’s potential of people, families and communities; develop system needs and improve their experience of care; leaders; ensure workforce health and wellbeing whilst driving 4. care closer to home. innovation and performance.
To deliver the above ambition the system has a number of priorities For the system: Faster, safer and more convenient care; for and the : patients and the public, staff system improved access; help patients manage their health; help clinicians
to use the full range of their skills; reduce bureaucracy; improved For patients and the public: Improve cancer screening and access to services to ensure people receive the right care, first outcomes; people only go into acute hospital when care cannot be time. provided in a community setting; improve prevention and early detection and intervention for heart disease and breathing Brexit problems; strengthening the partnership between health and social The United Kingdom (UK) left the European Union (EU) on 31 care services to support people with multiple health conditions; January 2020 after ratifying the Withdrawal Agreement with the EU. increasing capacity in musculoskeletal services and keeping people Unless an extension is agreed the UK has to negotiate a framework well for longer; healthy babies; support for new mothers; and for a future relationship with the EU before the end of the transition improved child health and wellbeing to reduce health inequalities; period, 31 December 2020. If instead the UK leaves the EU without increasing access to psychological therapy treatment; improving a deal the UK would become a third country with no withdrawal mental health wellbeing for those will depression and dementia; agreement or framework for a future relationship in place between support people with learning disabilities to live well with reasonable the UK and the EU. The UK and the EU both state that this is an adjustments in their support and care; reducing A&E attendances unlikely but possible outcome of the current negotiations. LCHS and waiting times; expand and reform services to ensure patients continues to monitor and review the progress and any associated quickly get the care they need. risks relating to Brexit through its governance and assurance
processes.
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Key issues and risks to achieving LCHS’ objectives Aims Objectives Risks and issues Providing high To deliver safe NHSPS owned estate is not adequately maintained (especially critical systems); The Landlord quality, safe, services (NHSPS) failing in its duties by maintaining to SFG20 (Core) rather than SFG20 (enhanced) for personalised HTM (health care premises) and by not scheduling maintenance adequately; Loss of service care and/ or damage to persons leading to an impact upon the health of persons affected and/ or their care; Patients being treated in urgent care centres deteriorate in the department while awaiting onward transfer to A&E; Delayed response by East Midlands Ambulance Service; The urgent and emergency care system in Lincolnshire may be overwhelmed in the winter period; multi-faceted operational and safety pressures on Lincolnshire acute hospital trust; Patient safety and quality caused by the poor performance of the contracted pathology service 'pathlinks' which provides pathology testing services across LCHS services including Lincolnshire Integrated Sexual Health Service, hospitals. To deliver services that Lack of adequate staffing; the Trust being unable to recruit appropriate staff; patients, public are co-designed with and partners are not adequately involved and engaged in service development. partners, patients, staff and carers To maintain our CQC Inadequate capacity to provide corporate support; lack of organisational capacity and capability; Outstanding rating in inability to evidence or showcase outstanding performance 2019/20 and onwards. Ensuring value Sustaining service Lack of understanding or consistency around contractual obligations; inability to evidence or for money and viability while showcase outstanding performance, value for money and quality; competition from other financial demonstrating the providers; growth of community services does not materialise; lack of engagement from sustainability value of our services stakeholders in reviewing and considering other contracting approaches; inadequate capacity to
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provide corporate support; lack of support from procurement provider. Real time business Insufficient capacity and capability to integrate corporate teams to deliver a full business intelligence partnering offer; lack of organisational capacity and capability; lack of performance demonstrating management strategy; existing hardware and software may limit ability to develop real time productivity and value business intelligence; the Trust’s service portfolio management approach is delayed; lack of for money clinical capacity; KPIs not being updated since the new integrated performance report was introduced. Deliver 2019/20 Service developments do not realise required savings to meet the efficiency target; identified financial plan and efficiency schemes are not recurrent; inability to manage currently unknown cost pressures; control total adverse resolution to the HMRC dispute; trust does not receive income for services delivered in support of the wider health economy. Building a Right people, right Lack of candidates to fill difficult to recruit to posts; lack of operational capacity and capability in quality, skills, right place, right order to proactively manage attendance; lack of credible appraisal in capturing learning productive and time requirements in line with the training needs analysis reporting; lack of clinical and corporate supported buy-in to vacate premises; lack of clarity regarding requirements including UTCs; lack of pace of workforce achieving rationalisation plan by third parties; the impact of system priorities on delivering LCHS priorities; operational workforce does not fully engage with the full system capabilities; risk of delivering at pace due to competing demands and resources; lack of buy in from workforce around cyber security. Strengthening Building positive Not understanding our partners and stakeholders; failure to deliver services in line with the positive relationships with all specifications; lack of understanding by commissioners of what LCHS has to offer and the value reputation of stakeholders of our offer/failure to promote our benefits; lack of understanding or consistency around the Trust contractual obligations and a failure to work closely with LCHS to resolve; lack of resource to effectively manage relationships; CCG merger creates a distraction; failure to capitalise on our outstanding status; not keeping pace with competitors including technical innovations and
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current good practice. Play leading role in the Lack of capacity to lead/be an active partner in system delivery groups; commissioners want to establishment of an lead the process rather than providers or in partnership; lack of clarity around governance in the Integrated Care system; lack of strategic partnership development to create new delivery models; failure to System (ICS) in develop relationships with Primary Care Networks; ICS process fails or national position Lincolnshire changes; lack of clarity in direction and requirements from commissioners; lack of clarity around system governance; lack of capacity and capability to implement new contracting approaches. Leading Homefirst - with National workforce shortages including medical workforce and delivery of the new medical integration and partners, shape and model; section 75 arrangement with local authority ending in August 2019; retention of the innovation lead the community nursing and community hospital workforce; change in commissioning intentions implementation of regarding urgent care, community hospitals and specialist services including the possibility of healthcare change and competitive tendering; lack of engagement with primary care networks; failure to transform the improvement across community nursing teams; failure to fully utilise digital enablers. Lincolnshire Drive a digital Lack of buy-in from clinical staff; security risks and cyber-attacks; different pace of change revolution in integrated across system partners leading to a lack of timely decision-making and duplication; protracted community care in multi-agency procurement exercises; lack of capital or management of depreciation. Lincolnshire
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Single Oversight Framework (SOF) attraction and retention strategy for medical roles and an expansion The Single Oversight Framework outlines the joint approach NHS of the Advanced Clinical Practitioner workforce to reduce our England and NHS Improvement take to overseeing NHS trust’s reliance on agency staff. In 2020/21 the trust will focus on fully performance and identifying where commissioners and providers implementing the revised model. may need support. Each trust receives an overall rating of one to four based on data monitoring and NHSE/I’s judgement of Quality account performance providers’ circumstances across the five themes of quality of care, The quality account priorities for 2019/20 were discussed with finance and use of resources, operational performance, strategic stakeholders including staff groups and patients and were then change and leadership and improvement capability. SOF segment agreed with the LCHS Trust Board and the Quality and Risk 1 is the top rating trusts can receive. Committee.
LCHS was consistently rated ‘SOF 1’ overall for most of 2019/20, The priorities were chosen in consideration of the national audit meaning there were no evident concerns and no support needs recommendations, local prevalence and feedback from Lincolnshire identified. However, as a rural provider of community health, LCHS Healthwatch and input from Lincolnshire commissioners. experiences the pressures from the skills shortage of medical The 3 quality priorities focussed on for 2019/2020 have been professionals across England. Due to difficulties recruiting and monitored by reporting through the trust’s Quality and Risk retaining sufficient substantive doctors to staff our medical model Committee and the LCHS operational plan. Each priority has been we became increasingly reliant on temporary, agency staffing in this led throughout the year by a lead clinician supported by clinical area which resulted in significant overspend. This meant that in teams. November 2019 we were rated as a ‘4’ for ‘Agency Spend’ under the ‘Finance and use of resources’ theme. This rating acted as an The following section of the report provides an update on the override trigger to our overall SOF rating, leading to a reduction in achievements for each of them. the overall rating from a ‘1’ to a ‘3’ despite all other SOF metrics remaining rated at ‘1’. We have developed and are now implementing a revised medical model underpinned by a new
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Quality priorities and achievement Quality summary of performance Safe staffing Quality Account Priority Delivery Under the leadership of the new Director of Nursing, LCHS has reviewed safe staffing across all services and has developed Priority 1: Allied Health Professional Services (AHP) transformation plans for Community Nursing services and the four using Therapy Outcome Measures (TOMs) with community hospitals. These programmes of development are being patients in the community to support driving clinically led and implementation in the coming year will we believe achievement of rehabilitation and improvement goals. make a significant improvement in many areas of patient and staff experience. The trust will continue to report progress through its Priority 2: Patients cared for by Macmillan services are supported to die in their preferred place of death Quality and Risk Committee on a bi-annual frequency. (PPD). Serious Incidents and incidents Priority 3: Improving patient access to our services The Trust reports all incidents of any type on Datix and in 2019 / and reducing anxiety in the patient experience for 2020 recorded a total of 5824 incidents. Throughout the year the those with a disability or impairment through the trust has continued its record of being a consistently high reporter introduction of the AccessAble App of incidents reflective of our positive safety culture recording 2390
incidents categorised as patient safety with an associated severe Priority 2 harm/death rate of 0%. • The final performance of 89.12% does not meet the agreed
priority account target of 95% set prior to the publication of a In 2019/2020 LCHS reported 10 serious incidents which included 4 national target falls, 3 unexpected deaths (not hospital based), and 2 medication • Delivery of national target set from quarter 2 at 80% was achieved errors and 1 relating to an invasive clinical procedure. All serious
Page 25 of 68 Lincolnshire Community Health Services NHS Trust | Annual Report and Accounts 2019/20 incidents were investigated thoroughly and action plan agreed within the required timescales. Safety Alerts Medication errors The trust has responded to all safety alerts within the required The trust continues to make good year on year progress in reducing timescales. medication errors with further improvements planned in our community teams. Both our community teams and our hospitals Safeguarding remain well below the national benchmarking averages. Lincolnshire Community Health Services NHS Trust (LCHS) continues to meet all of its statutory and contractual safeguarding Safety thermometer obligations. The robust reporting, and quality assurance processes The safety thermometer looks at four harms: pressure ulcers, falls, continually recognises that our staff demonstrate their duty of care blood clots and urine infections for those patients who have a to our patients and service users, with many examples of urinary catheter in place. These are for patients in community appropriate multiagency challenge and excellent patient advocacy hospital beds and seen at home by the community nursing teams to enable our patients to live free from harm and abuse. and is collated based on one day per month. This helps the trust to understand where improvements are required to be made. The target for this indicator is that 95% of our patients do not experience harm which has consistently been exceeded by the trust for the past 2 years. On average the trust collects data on 744 patients per month and scored a six month average of 97.30% (September 19 – February 2020) against a national benchmark of 96.60%. Due to COVID19 the collection of Safety thermometer data has been suspended from March 2020.
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Performance summary Accountable Officer: Maz Fosh, Chief Executive
Lincolnshire Community Health Services NHS Trust In 2019/20 LCHS continued to deliver safe, high quality community healthcare services to the population of Lincolnshire and urgent Signature: care services to the people of Peterborough. The trust has done this within its financial control total which has enabled us to make a positive contribution to a challenged healthcare system with a substantial financial deficit. Date: 09/06/2020
LCHS continues to have a robust, values-based approach to recruiting, retaining and managing our people to ensure we have the right skills, in the right place at the right time. We continue to invest in the health and wellbeing of our people as we believe that staff who are healthy and feel supported deliver better patient care.
Our focus on delivering great services close to home in partnership with other providers has increased over the last year as we move toward greater integration across the wider health and social care system in line with our strategic objectives and the national NHS Long Term Plan.
Page 27 of 68 Lincolnshire Community Health Services NHS Trust | Annual Report and Accounts 2019/20 Accountability Corporate governance report
Directors’ report Composition of the Board of Directors Chair: Elaine Baylis QPM
Chief Executive Andrew Morgan (to 30 June 2019) Marie (Maz) Fosh (from 1 July 2019 to 31 March 2020)
Executive Directors Director of Workforce and Transformation and Deputy Chief Executive Marie (Maz) Fosh (to 30 June 2019)
Director of Workforce and Transformation Ceri Lennon (interim from 1 July 2019 to 31 March 2020)
Director of Nursing, Operations and Allied Health Professionals Susan Ombler (interim to 28 April 2019) Tracy Pilcher (from 29 April 2019) (Deputy Chief Executive from 1 July 2019)
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Director of Finance and Business Intelligence: During the year the Trust Board held eight meetings including two Sam Wilde extraordinary meetings in December and March. During the Medical Director: financial year the meetings had a 93.5% attendance of non- Dr Yvonne Owen executive directors.
Non-Executive Directors Names of directors forming an audit committee Alan Kent Alan Kent – chair Liz Libiszewski Kevin Lockyer – non-executive director Kevin Lockyer Liz Libiszewski - non- executive director position (until 9 June 2019) Murray Macdonald Gail Shadlock – non-executive director (from 10 June 2019) Gail Shadlock (from 10 June 2019) Sam Wilde – director of finance and business intelligence
Also in attendance: Also in attendance: Head of corporate governance Head of financial accounts Corporate Administration Manager and PA Head of corporate governance Client manager (internal audit); During 2019/20, the Trust Board met on a monthly basis until May Director (external audit); 2019. The frequency of Trust Board meetings moved to bi-monthly Senior manager (counter fraud) with the next meeting being in July 2019.
The Trust Board consists of a chair, four non-executive directors (excluding the chair) and five voting executive directors (including the chief executive). The Head of Corporate Governance is also in attendance.
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Register of directors’ interests
Entry Name of Official Appointment in Nature of Interest (Pecuniary or Non- Current Date Date Date Number Employee LCHS Pecuniary) declared Interest interest Recorde interest declared d ceased
1 E Baylis Chair Owner of Baylishill, a performance Yes 13/4/11 13/4/11 development coaching and consultancy business, operated as a sole trading company from home address.
Director & Trustee (Deputy Chair) Yes 24/4/11 24/4/11 30/03/20 Lincolnshire Action Trust. This is a registered charity & limited company that seeks to improve the skills and employability of offenders and prisoners
Chair United Lincolnshire Hospitals NHS Yes 1/1/2019 8/1/19 Trust
Chair of the Lincolnshire Co-ordinating Yes 1/3/2018 14/4/18 Board.
2. A Morgan Chief Executive Board Member – East Midlands Leadership No 26/03/15 27/03/15 30.04.19 (on secondment to United Academy Lincolnshire Hospitals NHS Trust from 01.07.19)
Trustee – Linkage Community Trust Yes 01/05/19 07/05/19
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Entry Name of Official Appointment in Nature of Interest (Pecuniary or Non- Current Date Date Date Number Employee LCHS Pecuniary) declared Interest interest Recorde interest declared d ceased
3. M Fosh Chief Executive Nil Yes 10/03/14 10/03/14
4. M Macdonald Non-executive Director Chair and Trustee - Manby Scout Association Yes 14/04/15 19/07/13 31.03.20
CEO – Lincolnshire Housing Partnership Yes 10/4/18 16/4/18 31.03.20 (following merger of Boston Mayflower Ltd and Shoreline Housing Partnership Ltd)
Member of North East Lincolnshire Yes 27/2/20 2/3/20 31.03.20 Healthwatch
5. K Lockyer Non-executive Director Director, KML Consulting Ltd Yes 26/07/15 30/09/15
Managing Partner, Adaptus Consulting LLP Yes 26/07/15 30/09/15
Director, Sessions House CIC Yes 09/12/16 29/11/18
Director, DTKL Limited Yes 30/08/18 29/11/18
6. S Wilde Director of Finance and Governor – Taplon School Sheffield No 1/6/18 6/6/18 1/5/19 Business Intelligence
Member of the HFMA Costing for Value Yes 10/10/19 11/11/19 Institute Council
7. E Libiszewski Non-executive Director Elizabeth Libiszewski Consulting Yes 09/05/17 11/05/17
Non-executive Director - United Lincolnshire Yes 01/01/19 08/01/19 Hospitals NHS Trust
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Entry Name of Official Appointment in Nature of Interest (Pecuniary or Non- Current Date Date Date Number Employee LCHS Pecuniary) declared Interest interest Recorde interest declared d ceased
Husband is a Non-executive Director at St Yes 13/3/18 13/3/18 Barnabas Hospice
8. A Kent Non-executive Director Director and Shareholder of Litmus Health Yes 31/01/18 02/02/18 Limited
9. Y Owen Medical Director LIVES Trustee Yes 6/6/18 6/6/18
GP Partner at East Lindsey Medical Group Yes 29/05/20 29/05/20
10. T Pilcher Director of Nursing, AHPs Nil Yes 29/04/19 7/5/19 and Operations
11. C Lennon Director of People and Nil Yes 1/7/19 1/7/19 Innovation
12. G Shadlock Non-executive Director Director of a village Community Enterprise Yes 9/7/19 11/7/19 Company
13. S Ombler Interim Director of Family member holds lead commissioner role Yes 28/8/18 30/8/18 Nursing, AHPs and for Urgent and Emergency Care with Operations bordering CCG (North East Lincs CCG), which includes portfolio of Northern Lincolnshire and Goole Hospitals NHS Trust.
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Statement of the chief executive’s responsibilities as the To the best of my knowledge and belief, I have properly discharged accountable officer of the trust the responsibilities set out in my letter of appointment as an Accountable Officer. The Chief Executive of NHS Improvement, in exercise of powers conferred on the NHS Trust Development Authority, has designated Accountable Officer: that the Chief Executive should be the Accountable Officer of the Maz Fosh, Chief Executive trust. The relevant responsibilities of Accountable Officers are set Lincolnshire Community Health Services NHS Trust out in the NHS Trust Accountable Officer Memorandum. These include ensuring that:
there are effective management systems in place to safeguard public funds and assets and assist in the implementation of Signed: corporate governance; Date: 9th June 2020 value for money is achieved from the resources available to
the trust; the expenditure and income of the trust has been applied to the purposes intended by Parliament and conform to the authorities which govern them; effective and sound financial management systems are in place; and annual statutory accounts are prepared in a format directed by the Secretary of State to give a true and fair view of the state of affairs as at the end of the financial year and the income and expenditure, recognised gains and losses and cash flows for the year.
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Annual governance statement control has been in place in Lincolnshire Community Health Services NHS Trust for the year ended 31 March 2019 and up to Scope of Responsibility the date of approval of the annual report and accounts. As Accountable Officer, I have responsibility for maintaining a Capacity to handle risk sound system of internal control that supports the achievement of the NHS Trust’s policies, aims and objectives, while safeguarding The Trust has a Risk Management Strategy which is endorsed by the public funds and departmental assets for which I am personally the Trust Board. The most recent refresh of the strategy, including responsible, in accordance with the responsibilities assigned to me. review and approval of the Risk Appetite Statement, was completed I am also responsible for ensuring that the organisation is and approved in January 2020. administered prudently and economically and that resources are The strategy is available to the public and employees through its applied efficiently and effectively. I also acknowledge my publication on the Trust website. The purpose of the strategy is to responsibilities as set out in the NHS Trust Accountable Officer ensure that risks to the quality and delivery of patient services and Memorandum. care are managed, to protect the services, reputation and finances The purpose of the system of internal control of the Trust, to create a culture where staff acknowledge risk as the responsibility of everyone and to ensure that the Trust meets its The system of internal control is designed to manage risk to a statutory obligations. The strategy defines the structures for the reasonable level rather than to eliminate all risk of failure to achieve management, ownership, review of risks and risk criteria, control policies, aims and objectives; it can therefore only provide and gaining assurance of risk and the methods in which risk issues reasonable and not absolute assurance of effectiveness. The are considered and assessed. system of internal control is based on an ongoing process designed The risk management process is owned by Trust Board with to identify and prioritise the risks to the achievement of the policies, Executive Directors being directly accountable for each risk and aims and objectives of Lincolnshire Community Health Services appropriate and effective mitigating actions. All risks on the Trust NHS Trust, to evaluate the likelihood of those risks being realised Corporate Risk Register are reviewed at least monthly by Executive and the impact should they be realised, and to manage them Directors. Feeding into this are the Clinical Operational Risk efficiently, effectively and economically. The system of internal
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Register, monitored through the Executive-led Effective Practice related risks being managed through the Bronze, Silver and Gold Assurance Group and informed by local risk registers managed by Command response model. Quality Assurance Managers, and the Corporate Services Risk The risk and control framework Register, monitored through the Trust Leadership Team and managed by the Corporate Governance team. Robust mechanisms The system of internal control is designed to manage risk to a are in place to ensure risks are managed effectively, moved reasonable level rather than to eliminate all risk of failure to achieve between registers appropriately and to ensure sufficient time is policies, aims and objectives. The organisation’s Risk Appetite allocated by each responsible committee or forum for their Statement is published on the website and reviewed periodically consideration, review and management. while the various risk registers are considered in its context.
Through the risk identification process staff at all levels are able to The Trust Board is responsible for the management of key risks. identify, assess and develop mitigating action plans to reduce and The key areas of those risks are managed through: manage each risk effectively. The Risk Management Strategy COVID-19 Risk Register provides the overarching framework and guidance to enable this Corporate Risk Register along with training and support provided by the Corporate Board Assurance Framework Governance and Quality Teams. The Quality Assurance Managers Financial risk management play a key role, individually and collaboratively, in effecting Compliance with targets consistency in the assessment of risks. Collectively, the Quality Single Oversight Framework Assurance Managers and Corporate Governance team work to Operational Delivery Plan extend this consistency from the operational risk registers into the Performance management reporting Corporate Risk Register.
The Trust’s approach to corporate governance is rooted within best To support and enable the Trust to respond effectively to COVID-19 practice and is regularly reviewed and assessed through internal risks and at pace an interim process was established in line with the processes. While the Strategy was most recently reviewed in Risk Management Strategy with the amendment of COVID-19
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January 2020, regular reports at every meeting of the Trust Board Risks that patients treated within LCHS services could comment on the status quo and propose ongoing improvements deteriorate due to delays while awaiting ambulance transfer, and developments. The Corporate Risk Register is reviewed and resulting in patient harm. approved by the Trust Board as part of this process. In addition, processes have been evolved to assist Executive Directors in Of the four sample high-scoring risks from 2019/20 detailed above, assessing risks under their area of responsibility against those for three were effectively managed to reduce the risk score and remain which their peers are responsible. This harmonisation process not under review while the actions are underway to achieve the score only promotes collective as well as individual responsibility at the which it is expected to be achieved due to these mitigations. The highest level but also promotes consistency in assessment. fourth risk remains managed and under close and regular review.
Among the key high-scoring risks on the Corporate Risk Register Another ongoing high profile risk is the pursuit by the HMRC of a during 2019/20 were: historic claim in relation to the employment status of GPs providing out of hours services. This potentially could have an adverse Risks to service sustainability and deliverability due to impact on service delivery and the financial and reputational financial challenges and future changes to commissioning, standing of the Trust. A hearing that was due to take place in with the potential to result in reduction in income or January 2020 was delayed while a linked case was heard, and it is opportunity to invest, affecting financial viability of the Trust anticipated that this matter will be resolved during 2020/21. and its services; Risks that the inadequate maintenance of the NHS Property The COVID-19 Risk Register identifies risks that have arisen during Services-owned estate could result in a loss of service the COVID-19 level 4 National Emergency Trust response at a and/or damage to persons; corporate level and details the controls in place to mitigate or reduce those risks. Any risks are rated based on likelihood and Risks that urgent and emergency care services across potential impact both before and after mitigation. The target risk Lincolnshire could become overwhelmed due to periods of score is the level at which it is expected the risk will rest following high activity, resulting in patient safety issues; the successful application of actions and controls, and is taken in
Page 36 of 68 Lincolnshire Community Health Services NHS Trust | Annual Report and Accounts 2019/20 consideration of the Trust’s Risk Appetite Statement. and long-term workforce strategies and staffing systems to comply with the ‘Developing Workforce Safeguards’ recommendations. In There is a robust Board Assurance Framework in place which sets addition, PEG has provided People Strategy progress reports, out the key controls and assurances on controls to safeguard assurance reports and updates risks and work-plans to FPIC. All against the key risks to the achievement of the strategic objectives. policies approved by this forum are able to be escalated to Board The Board Assurance Framework is aligned to the organisation’s for endorsement and/or challenge. Quality and Equality Impact Operational Plan and is reviewed at every meeting of Trust Board Assessments are completed to assess substantive changes to and its assurance committees. In addition, there are formal risk workforce. management procedures in place with effective review and management procedures which incorporate both a controls Sharing the learning through risk related issues, incidents, assurance and a risk assessment. complaints and claims is an essential component to maintaining the risk management culture within the trust. Learning is shared The committees of the Trust Board – Quality and Risk Committee through service line structures and trust-wide forums such as the and Finance, Performance and Investment Committee – assess Quality and Risk Committee, Stakeholder, Engagement and each and every business item against the Board Assurance Involvement Group, Infection Control Committee, Emergency Framework. This enables direct assessment against compliance Planning Group, Information Governance Management Assurance on all fronts, including CQC requirements. The committees also Group, Safeguarding and Patient Safety Group, Effective Practice review the risk registers monthly, immediately following their Assurance Group, Mortality Review Panel and Health and Safety monthly review by Executive Directors and prior to the committees’ Committee. findings/recommendations progressing to Trust Board. The Audit
Committee is detailed later in this document. Learning is acquired from a variety of sources which include: analysis of incidents, complaints, claims and acting on the Separately, the People Executive Group (PEG), chaired by the findings of investigations Executive Director of People, has delegated responsibility for • quality impact assessments ensuring the Trust has developed and managed the short, medium • equality impact assessments
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• external Inspections • All staff are supported appropriately when they speak up or • internal and external audit reports support other people who are speaking up; • clinical audits • The Board is fully sighted on, and engaged in, all Freedom to • outcome of investigations and inspections relating to other Speak Up matters and issues that are raised by people who organisations are speaking up;
• Safety and quality are assured. Freedom to speak up
Another key area of learning for the Trust via engagement with In October 2019 the National Guardian Office (NGO) published the employees is through the Freedom to Speak Up Guardian first index of the Guardians. This uses the national staff survey to (FTSUG). This role supports the organisation in complying with the benchmark the speak up culture across the NHS, and seeks to outcomes set up by the National Guardian Office and the outcomes ensure that a culture of openness is established within the DNA of include: the NHS. • A culture of speaking up Lincolnshire Community Health Services has scored 84% in this being instilled throughout the first index. This places LCHS high on the national list, with the organisation; highest scoring trust scoring 87%. Lessons from the highest placed • Speaking up processes are trusts have been reviewed and all actions are in place and being effective and continuously embedded in LCHS; improved;
• All staff have the capability to • The visibility of our leaders and executive team is seen as a speak up effectively and priority managers have the capability to support those who are • Back to floor visits from senior leaders and executives are speaking up; increasing
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• An ethos of compassionate leadership is embedded • Staff have the opportunity for informal discussions with Themes of Concerns Staffing (3) leaders • We have a robust induction programme which includes Behaviour/Attitud e (20) meeting an executive and hearing messages from the speak up guardian and staff side team. Concern relating to TUPE/ change • We have an active staff side in process (1) Recruitment
processes (1)
Concerns Raised Working time/ Process query (4)
Q1 (12) The main issue that the FTSUG has been contacted about relates Q2 (3) to behaviour, attitude or bullying. These continue to be staff who Q3 (9) Q4 (5) are seeking an independent view of a situation to help determine their next action. Four referrals were made to the mediation process and two of these cases progressed to formal grievance processes
and were investigated, none of which were upheld.
. In total 29 concerns were raised with the FTSUG in 2019/20 Response and engagement from leaders and executives compared to 25 2018/19 and 6 in 2017/18. The FTSUG has continued to work with leaders at all levels and
heads of service to support investigations and address any
Page 39 of 68 Lincolnshire Community Health Services NHS Trust | Annual Report and Accounts 2019/20 concerns. Meetings with the Chair, Chief Executive, Executive • NHS England and NHS Improvement (NHSEI) Directors and Non-Executive Directors have taken place at regular • NHS Providers intervals. The FTSUG reported that there were no concerns • Sustainability and Transformation Partnership (STP) System regarding access or availability to appropriate leadership Executive Team (SET) throughout 2019/20. • STP Executive group • Executive STP groups (including Finance Bridge Group) System working and partnerships • System Winter Team • Groups to monitor impact and preparedness for Brexit Fulfilling the wider objectives of the Trust requires effective The Trust is fully compliant with the registration requirements of the partnership working in addition to the internal governance and Care Quality Commission. control framework. As the Chief Executive, I am accountable to the Trust Board, the Chair and NHS Improvement. I am also Lincolnshire Community Health Services NHS Trust has taken all accountable, along with the Trust Board, to the Secretary of State precautions, actions and Trust-wide reviews to comply with the via NHS Improvement. NHS Provider licence and confirm compliance with conditions G6 (2), G6(3) and current and future compliance with FT4(8).
I ensure that the Trust works effectively in partnership across the The trust has published on its website an up-to-date register of wider health community in Lincolnshire. Key partnerships include: interests, including gifts and hospitality, for decision-making staff • Executive groups of Clinical Commissioning Groups (CCGs) (as defined by the trust with reference to the guidance) within the in Lincolnshire and adjoining counties past twelve months, as required by the ‘Managing Conflicts of • Health commissioners Interest in the NHS’ guidance. • Health Scrutiny Committee As an employer with staff entitled to membership of the NHS • Joint Staff Consultation and Negotiation Committee Pension Scheme, control measures are in place to ensure all • Lincolnshire County Council employer obligations contained within the scheme’s regulations are • Lincolnshire Healthwatch complied with. This includes ensuring that deductions from salary,
Page 40 of 68 Lincolnshire Community Health Services NHS Trust | Annual Report and Accounts 2019/20 employer’s contributions and payments into the Scheme are in Quality and Risk Committee throughout the year. accordance with the Scheme rules, and that member Pension Scheme records are accurately updated in accordance with the The weekly Trust Leadership Team receives updates on the timescales detailed in the Regulations organisation’s financial position including progress against setting and meeting savings targets and consideration of challenges and Control measures are in place to ensure that all the organisation’s opportunities. Key progress is reported and discussed at every obligations under equality, diversity and human rights legislation are Board meeting, either in public or private session dependent on the complied with. content to ensure compliance against the Annual Financial Plan. The Trust has undertaken risk assessments and has a sustainable Officers of the Trust manage resources in compliance with the development management plan in place which takes account of UK Standing Financial Instructions which are reviewed alongside other Climate Projections 2018 (UKCP18). The Trust ensures that its Standing Orders annually. obligations under the Climate Change Act and the Adaptation Reporting requirements are complied with. Both internal and external audit support these arrangements, with Review of economy, efficiency and effectiveness regular reporting, particularly to the Audit Committee. Following the of the use of resources conclusion of the 2019/20 year, the Trust changed its internal audit partner and the Trust Leadership Team met with the new auditors The Trust Board approves the organisation’s Annual Operational in April 2019 to ensure the programme for the forthcoming year Plan. It is monitored and regularly reported upon to Board as well would continue to support the Trust in meeting its objectives. as Audit Committee (in terms of the arrangements that are in place) and the Finance, Performance and Investment Committee, from Information governance which the Board received monthly updates through 2019-20. As There were no Serious Incidents Requiring Investigation (SIRI) well as receiving endorsement from Trust Board, the Performance relating to Information Governance reported to the Information Dashboard and Integrated Performance Report was prepared by Commissioner’s Office during 2019/20. the Director of Finance and Business Intelligence and considered by the Finance, Performance and Investment Committee and by the Information Governance is a high priority for the Trust. The
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Information Governance Management Assurance Group (IGMAG) data held on IT systems is restricted to authorised users through oversees all Information Governance (IG) issues and reports to the Role Based Access Control (RBAC) with a smartcard or secure Quality and Risk Committee. The IGMAG is chaired by the Serious login. Incident Responsible Officer (SIRO), who is the Director of People and Innovation. IG training is incorporated into the mandatory annual training and follows the Core Skills for Health Framework. IG is also part of the The IGMAG provides quarterly assurance reports and updates risks induction training for new starters, including temporary. Dedicated and work-plans to Quality and Risk Committee. specialised training for SIRO, IAO and IAA is available through
The SIRO is responsible for overseeing the development and external trainers or may be delivered in-house utilising accredited implementation of the trust’s Information Risk Management training material Ad-hoc training is provided on request or individual Strategy. Information Governance risks are managed in accordance need. with the Risk Management Strategy and recorded on the Corporate Data quality and governance Risk Register. The Performance and Information team conduct regular data quality checks on datasets and reports. They are also involved with Staff are encouraged to report Information Governance incidents national NHS Benchmarking work which enables the Trust to and seek further advice and guidance regarding any additional benchmark its own data with that of other Trusts to enable actions that may need to be taken and implemented. comparators and scope for improvement. The team works closely Each IT system; whether corporate or clinical, has a designated with the Digital Health team to enable front-end changes to Information Asset Owner (IAO) with defined responsibilities, correlate into meaningful data and analysis. including risk management and responsibility for identifying IG risks. These are supported by Information Asset Administrators A Data Quality Group provides the Trust with assurance that the (IAA) who provide support at a local level. Trust’s data and information, provided both internally and externally, is being carefully monitored and that improvements are All staff are governed by a code of confidentiality and access to being identified and implemented where necessary. It also enables
Page 42 of 68 Lincolnshire Community Health Services NHS Trust | Annual Report and Accounts 2019/20 the Trust to demonstrate its commitment to encouraging a culture of reviews, Lessons Learned reports and National Quality Board data. continuous improvement and accountability. The Finance, Performance and Investment Committee has oversight for the Data Quality and Risk Committee includes attendance of Quality Quality Group and receives a report from them every 6-8 weeks on Assurance Managers and a culture of health two-way challenge data quality assurance. The report then goes to the Trust ensures the validity of data and the scrutiny of reporting. Internal Leadership Team and Trust Board meetings Audit undertook a review of the Quality Account during the year and provided some recommendations, all of which were enacted and Annual Quality Account reported to the Quality and Risk Committee and monitored by the Audit Committee. The directors are required under the Health Act 2009 and the National Health Service (Quality Accounts) Regulations 2010 (as Board and Trust Leadership amended) to prepare Quality Accounts for each financial year. The Trust Board at the close of the 2019/20 year comprised the Chair (Elaine Baylis), five Non-Executive Directors (Alan Kent, Liz The Quality Account is developed through formal reporting to the Libiszewski, Kevin Lockyer, Murray McDonald and Gail Shadlock), Quality and Risk Committee. It considered the development of the the Chief Executive (Maz Fosh) and four Executive Directors (Ceri account across four meetings during the year receiving updates in Lennon, Tracy Pilcher, Yvonne Owen, Sam Wilde). September, December and February during the 2019/20 year prior Changes to the Board membership in-year were: to final approval, which has been delayed due to the COVID-19 • response, currently planned for July 2020. This is reported to Gail Shadlock joined as a Non-Executive Director; Board by the Chair of the committee through the monthly updates • Murray McDonald left the Trust at the end of March 2020 as a following each stage. Non-Executive Director; • Andrew Morgan departed as Chief Executive on a seconded The Quality and Risk Committee considers a wealth of other basis and was replaced by Maz Fosh, previously deputy Chief relevant information through the year including quarterly updates on Executive, for the duration of the secondment; safeguarding, Quality Impact Assessment post implementation • Ceri Lennon joined as Executive Director of People, replacing Maz Fosh’s substantive post as Executive Director of
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Workforce and Transformation; and providing stewardship. • Tracy Pilcher joined as Executive Director of Nursing, AHPs Audit Committee and Operation, replacing Susan Ombler, who had previously filled this role on an acting basis. The Audit Committee meets quarterly and has a key role in providing assurance to the Trust Board on the control mechanisms The Trust Board met monthly throughout 2019/20 alternating that are in place across the Trust. The Audit Committee reviews the between formal public and private meetings one month and adequacy of all risk and control related disclosure statements informal meetings the next. The informal meetings were utilised together with any accompanying head of internal audit statement through a combination of strategy development sessions, Board prior to endorsement by the Trust Board. The committee receives development sessions and service visits. The Board’s main regular update reports from, among others, the Director of Finance committees – the Quality and Risk Committee and the Finance, and Business Intelligence, the Head of Corporate Governance and Performance and Investment Committee – also met monthly. The both internal and external audit. Remuneration and Terms of Service Committee met as required. In addition to a number of issues being reviewed on a continuous The outcome of a well-led review undertaken by Deloitte in January basis the Audit Committee gave further consideration during 2019 was reported back in March 2019, with its recommendations 2019/20 to risk management. This involved maturing the considered during 2019-20. The newly-established Head of arrangements so that the Treatment Plan, which had served an Service Group contributed to the considerations alongside Deputy effective purpose for 18 months as subsidiary register to the Directors resulting in the Board accepting many proposals and Corporate Risk Register, being developed in the two operational these being implemented during the year. New practice risk registers detailed earlier in this report. The committee also implemented as a result of the review included the move to bi- developed the concept of ‘target’ risk scores into more beneficial monthly meetings, engagement with services through the ‘expected’ risk scores, to focus on the achievability of the mitigating scheduling of service visits, enhancement of the existing Patient actions and to set a realistic outcome in line with the Trust’s risk Story initiative at Board meetings with expansion to alternate Staff appetite. Stories and consideration of Board’s dual role of having oversight
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address weaknesses and ensure continuous improvement of the The committee continues to develop and enhance mechanisms to system is in place. gain assurance on all areas that come within its terms of reference, which were also reviewed and amended during 2019-20. It My review is informed in a number of ways. The Head of Internal approves a programme of work by internal audit, external audit and Audit provides me with an opinion on the overall arrangements for counter fraud, based on a risk analysis with a number of new and gaining assurance through the Board Assurance Framework and on more in-depth clinical assurance mechanisms being introduced, to the controls reviewed as part of the internal audit work. Executive allow it to provide the necessary assurance to the Trust Board on managers within the organisation who have responsibility for the an on-going basis. development and maintenance of the system of internal control Review of effectiveness provide me with assurance. The Board Assurance Framework itself provides me with evidence of the effectiveness of controls that As Accountable Officer, I have responsibility for reviewing the manage risks to the organisation. effectiveness of the system of internal control. My review of the My review was also informed by: effectiveness of the system of internal control is informed by the delivery of audit plans by external and internal auditors work of the internal auditors, clinical audit and the executive unconditional registration with the Care Quality Commission managers and clinical leads within the NHS trust who have responsibility for the development and maintenance of the internal The Head of Internal Audit is required to provide an annual opinion control framework. I have drawn on the information provided in this on the systems and processes of internal control employed in the annual report and other performance information available to me. trust. The Head of Internal Audit Opinion provided a significant My review is also informed by comments made by the external assurance opinion for 2019/20. auditors in their management letter and other reports. I have been advised on the implications of the result of my review of the effectiveness of the system of internal control by the Board, the Audit Committee and the Quality and Risk Committee, as well as sub committees and others within the group structure, and a plan to
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During the year the trust has made real and sustainable improvements to its governance arrangements. It has embedded further structure and guidance in relation to the management of risk and clinical audit. Following on from wider structural changes, further improvements to re-align and enhance its governance arrangements were undertaken.
In conclusion, I am assured that no significant control issues existed within Lincolnshire Community Health Services NHS Trust during the 2019/20 year.
Maz Fosh, Chief Executive (Accountable Officer) Lincolnshire Community Health Services NHS Trust
9th June 2020
Page 46 of 68 Lincolnshire Community Health Services NHS Trust | Annual Report and Accounts 2019/20 Remuneration and staff report Remuneration and staff report
Board members and senior management remuneration (subject to audit)
Salaries and allowances for the year ending 31 March 2020 (subject to audit) Name and Title Period of 19/20 Salary Expense Performance pay Long term 19/20 Pension 19/20 Total Office Payments and bonuses performance pay Benefits1 Taxable and bonuses (Bands of (Nearest (Bands of 5k) (Bands of 5k) (Bands of 2.5k) (Bands of 5k) 5k) hundred) £00s £000s £000s £000s £000s £000s Mr AJ Morgan, Chief Executive To 35 - 40 28 0 0 7.5 - 10 45 - 50 30/06/20192 Mr S Wilde, Director of Finance & Full Year 105 - 110 131 0 0 32.5 - 35 155 - 160 Business Intelligence Ms T Pilcher, Director of Nursing, Commenced 100 - 105 44 0 0 127.5 - 130 235 - 240 Operations and AHPs. 29/04/2019
Mrs S Ombler, Acting Director of To 29/04/2019 5 - 10 8 0 0 0 5 - 10 Nursing, Operations and AHPs Mrs ME Fosh, Director of People Full Year 135 - 140 127 0 0 77.5 - 80 230 - 235 and Innovation to 30/06/19. Acting Chief Executive from 01/07/19. Mrs C Lennon, Acting Director of Commenced 75 - 80 7 0 0 25 - 27.5 100 - 105 People and Innovation 01/07/2019 Dr Y Owen, Medical Director3 Full Year 55 - 60 0 0 0 0 55 - 60 Mrs E Baylis, Chair Full Year 30 - 35 7 0 0 30 - 35 Mr M Macdonald, Non-Executive Full Year 5 - 10 10 0 0 5 - 10 Director Mrs E Libiszewski, Non-Executive Full Year 5 - 10 6 0 0 5 - 10 Director
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Mr K Lockyer, Non-Executive Full Year 5 - 10 5 0 0 5 - 10 Director Mr A Kent, Non-Executive Full Year 5 - 10 29 0 0 10 - 15 Director Mrs G Shadlock, Non-Executive Commenced 5 - 10 4 0 0 5 - 10 Director 10/06/2019
1. Pensions related benefits are based on the NHS Manual of Accounts methodology and the pension data is provided by the Pensions Agency. The benefits calculated incorporate 20 times the annual real increase in pension and do not represent actual payments made. Non-Executive Board members do not receive pensions as part of their remuneration. 2. Mr AJ Morgan joined United Lincolnshire Hospitals NHS Trust as Chief Executive on secondment from 01/07/2019. Salary shown in this report relates to April - June 2019. 3. Dr Y Owen also provided Out of Hours practitioner services to the Trust as an independent contractor to 31st May 2019, disclosure of the value of these payments can be found in the related parties disclosure of the Trust Annual Accounts 2019/20.
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Salaries and allowances for the year ending 31 March 2019 (subject to audit)
Name and Title Period of 18/19 Salary Expense Performance pay Long term 18/19 Pension 18/19 Total Office Payments and bonuses performance pay Benefits1 Taxable and bonuses (Bands of 5k) (Nearest (Bands of 5k) (Bands of 5k) (Bands of 2.5k) (Bands of 5k) hundred) £000s £00s £000s £000s £000s £000s Mr AJ Morgan, Chief Executive Full Year 145 - 150 150 0 0 0 - 2.5 160 - 165 Ms DD Cecchini, Director of 01/04/18 to 15 - 20 12 0 0 5 - 7.5 20 - 25 Finance & Strategy 31/05/18 Mr S Wilde, Director of Finance & 01/07/18 to 80 - 85 82 0 0 62.5 - 65 150 - 155 Business Intelligence 31/03/19 Mr S Wilde, Interim Director of 01/06/18 to 10 - 15 0 0 0 0 10 - 15 Finance & Business Intelligence2 30/06/18 Mrs LM Stalley Green, Director of 01/04/18 to 40 - 45 57 0 0 35 - 37.5 85 - 90 Nursing and Operations 31/08/18 Mrs S Ombler, Interim Director of 01/09/18 to 50 - 55 79 0 0 155 - 155.5 215 - 220 Nursing, AHPs and Operations 31/03/19 Mrs ME Fosh, Director of Full Year 110 - 115 114 0 0 25 - 27.5 145 - 150 Workforce & Transformation Dr S Elcock3, Interim Medical 01/04/18 to 0 - 5 0 0 0 0 0 - 5 Director 24/04/18 Dr Y Owen4, Medical Director 11/06/18 to 45 - 50 3 0 0 0 45 - 50 31/03/19 Mrs E Baylis, Chair Full Year 30 - 35 12 0 0 0 30 - 35 Mr M Macdonald, Non-Executive Full Year 5 - 10 8 0 0 0 5 - 10 Director Mrs E Libiszewski, Non-Executive Full Year 5 - 10 2 0 0 0 5 - 10 Director Mr K Lockyer, Non-Executive Full Year 5 - 10 6 0 0 0 5 - 10 Director Mr T Dannatt, Non-Executive 01/04/18 - 0 - 5 1 0 0 0 0 - 5 Director 31/10/18
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Mr A Kent, Non-Executive Full Year 5 - 10 34 0 0 0 5 - 10 Director
1. Pensions related benefits are based on the NHS Manual of Accounts methodology and the pension data is provided by the Pensions Agency. The benefits calculated incorporate 20 times the annual real increase in pension and do not represent actual payments made. Non-Executive Board members do not receive pensions as part of their remuneration. 2. Mr S Wilde value includes recharge from Norfolk Community NHS Trust for the month of June when Mr Wilde was Interim Director of Finance and Business Intelligence prior to substantive appointment. 3. Dr S Elcock costs recharged from Lincolnshire Partnership Foundation Trust based on 4 PA's. Pension benefits are available in the LPFT Annual Report. 4. Dr Y Owen also provides Out of Hours practitioner services to the Trust as an independent contractor, disclosure of the value of these payments can be found in the related parties disclosure of the Trust Annual Accounts 2018/19. Pension benefits for the year ending 31 March 2020 (subject to audit) Name and Title Real Real increase Total accrued Lump sum at Cash Equivalent Cash Equivalent Real Increase in Employer’s increase in in pension pension at pension age Transfer Value Transfer Value Cash Equivalent contribution to pension at lump sum at pension age at related to at 31 March at 31 March Transfer Value stakeholder pension pension age 31 March 2020 accrued pension 2020 2019 pension age at 31 March 2020 (bands of (bands of (bands of (bands of £5,000) £2,500) £2,500) £5,000) £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Mrs C Lennon, Acting 0 - 2.5 0 0 - 5 0 49 27 6 0 Director of People and Innovation Mrs ME Fosh, Acting 2.5 - 5 0 20 - 25 0 284 215 45 0 Chief Executive Mr AJ Morgan, Chief 0 - 2.5 0 - 2.5 70 - 75 210 - 215 1662 1570 8 0 Executive Ms T Pilcher, Director of 5 - 7.5 15 - 17.5 45 - 50 140 - 145 857 840 0 0 Nursing, Operations and AHPs Mrs S Ombler, Acting 0 0 20 - 25 50 - 55 454 446 0 0 Director of Nursing, Operations and AHPs Mr S Wilde, Director of 0 - 2.5 0 15 - 20 0 212 211 0 0 Finance and Business Intelligence Dr Y Owen*
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Pension benefits for the year ending 31 March 2019 (subject to audit) Name and Title Real Real Total Lump sum at Cash Cash Real Increase Employer’s increase increase in accrued pension age Equivalent Equivalent in Cash contribution to in pension pension at related to Transfer Value Transfer Value Equivalent stakeholder pension lump sum at pension age accrued at 31 March at 31 March Transfer Value pension at pension age at 31 March pension at 31 2019 2018 pension 2019 March 2019 age (bands of (bands of (bands of (bands of £2,500) £2,500) £5,000) £5,000) £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Ms DD Cecchini, Director 0 - 2.5 0 - 2.5 35 - 40 105 - 110 792 690 11 0 of Finance & Strategy Mrs ME Fosh, Director of 0 - 2.5 0 - 2.5 15 - 20 0 - 5 215 161 34 0 Workforce & Transformation Mr AJ Morgan, Chief 0 - 2.5 2.5 - 5 65 - 70 205 - 210 1570 1369 139 0 Executive Mrs LM Stalley Green, 0 - 2.5 0 - 2.5 25 - 30 20 - 25 406 325 24 0 Director of Nursing and Operations Mrs S Ombler, Interim 2.5 - 5 10 - 12.5 20 - 25 55 - 60 446 266 90 0 Director of Nursing, AHPs and Operations Mr S Wilde, Director of 2.5 - 5 0 - 2.5 10 - 15 0 - 5 175 110 36 0 Finance & Business Intelligence
Data used in the assessment of pension’s data is provided by NHS Pensions, lump sum and pensions do not include any adjustments for potential future legal remedy arising from the current ongoing Mcloud review into public sector pensions.
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Cash Equivalent Transfer Values Real Increase in CETV
• A Cash Equivalent Transfer Value (CETV) is the actuarially • This reflects the increase in CETV effectively funded by the assessed capital value of the pension scheme benefits employer. It takes account of the increase in accrued pension accrued by a member at a particular point in time. The due to inflation, contributions paid by the employee (including benefits valued are the member’s accrued benefits and any the value of any benefits transferred from another scheme or contingent spouse’s pension payable from the scheme. arrangement) and uses common market valuation factors for • A CETV is a payment made by a pension scheme or the start and end of the period. arrangement to secure pension benefits in another pension • In August 2019 the CETV methodology used by NHS scheme or arrangement when the member leaves a scheme Pensions was updated to take account of indexation on and chooses to transfer the benefits accrued in their former Guaranteed Minimum Pension (GMP) element of public sector scheme. pensions. As such it should be noted that 2020/21 values • The pension figures shown relate to the benefits that the include this indexation whereby 2019/20 values did not. individual has accrued as a consequence of their total membership of the pension scheme, not just their service in a Relationship between the remuneration report and exit senior capacity to which disclosure applies. packages, severance payments and off-payroll • The CETV figures and the other pension details include the engagements disclosures
value of any pension benefits in another scheme or In respect of the relationship between individuals in the arrangement which the individual has transferred to the NHS remuneration report and links to exit packages, severance pension scheme. payments and off payroll engagement disclosures, the following • They also include any additional pension benefit accrued to information is applicable: the member as a result of their purchasing additional years of • Exit packages – no relationship pension service in the scheme at their own cost. CETVs are • calculated within the guidelines and framework prescribed by Severance payments – no relationship • the Institute and Faculty of Actuaries. Off Payroll Engagements – Dr Y. Owen has provided Out of Hours practitioner services to the Trust as an independent
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contractor until 31 May 2019. The value of this can found in The banded remuneration of the highest paid director in the related parties disclosure of the Trust Annual Accounts Lincolnshire Community Health Services NHS Trust in the financial 2019/20. year 2019/20 was £150-155k (2018/19: £145-150k). This was 5.01 (2018/19: 5.45) times the median remuneration of the workforce, Remuneration policy for directors and senior managers which was £30,615 (2017/18: £27,078). LCHS has a Remuneration Committee. The purpose of the In 2019/20 and 2018/19 no employees received remuneration in committee is to agree appropriate remuneration and terms of excess of the highest-paid director. service for the chief executive, executive directors and other directors including all aspects of salary, provisions for other Remuneration ranged from £16,366 to £153,440 (2018/19: £50 to benefits, arrangements for termination of employment and other £149,522) contractual terms working to the NHS Improvement. 2019-20 2018-19 Highest paid director's remuneration £'000 150-155 145-150 Compensation on early retirement or for loss of office Median total £ £30,615 £27,078 Ratio 5.01 5.45 The Trust has not made any compensatory payments on early retirement for loss of office in 2019/20. Total remuneration above includes salary, non-consolidated
performance-related pay and benefits-in-kind. It does not include Payments to past directors severance payments, employer pension contributions and the cash The Trust has not made any payments to past directors in 2019/20 equivalent transfer value of pensions. (2018/19: also nil). Sharing of senior members of staff Fair pay disclosure (subject to audit) Since 1 July 2019, LCHS’s substantive chief executive, Andrew Reporting bodies are required to disclose the relationship between Morgan, has been on secondment to United Lincolnshire Hospitals the remuneration of the highest-paid director in their organisation NHS Trust (ULHT). This is not strictly a sharing arrangement as and the median remuneration of the organisation's workforce.
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ULHT is remunerating his salary back to LCHS. Andrew Morgan’s Social care staff 0 0 0 0 substantive role is being performed by Maz Fosh. This arrangement Other 0 0 0 0 is currently due to be in place until 31 March 2022. Total average numbers 1548 76 1624 1593 Of which: Number of employees (WTE) 0 0 0 0 Staff Report engaged on capital projects Number of senior managers by band Staff costs Female Male 2019/20 2018/19 Permanent Other Total Total Seniority Headcount Percentage Headcount Percentage Headcount Executive 4 80.0% 1 20.0% 5 £000 £000 £000 £000 Director Salaries and wages 47913 1566 49479 47440
Social security costs 4707 0 4707 4516 Staff numbers and costs Apprenticeship levy 236 0 236 226 Average number of employees Employer's contributions to 9221 0 9221 6253 NHS pension scheme (WTE basis) Pension cost - other 37 0 37 23 2019/20 2018/19 Other post employment 0 0 0 0 Permanent Other Total Total benefits Number Number Number Number Other employment benefits 0 0 0 0 Medical and dental 15 36 51 26 Termination benefits 0 0 0 286 Ambulance staff 0 0 0 0 Temporary staff 0 5659 5659 4507 Administration and estates 342 0 342 320 Total gross staff costs 62114 7225 69339 63251 Healthcare assistants and other 309 0 309 317 Recoveries in respect of 0 0 0 0 support staff seconded staff Nursing, midwifery and health 612 40 652 658 Total staff costs 62114 7225 69339 63251 visiting staff Of which Nursing, midwifery and health 0 0 0 0 Costs capitalised as part of 0 0 0 0 visiting learners assets Scientific, therapeutic and 270 0 270 272 technical staff Healthcare science staff 0 0 0 0
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Staff composition System, the Workforce Disability Equality Standard (WDES) and (correct as of 31/03/2020) the Workforce Race Equality Standard (WRES) all LCHS workforce
Band 1 19 policies undergo an equality impact assessment/equality analysis to Band 2 342 ensure they are fair. The equality analysis for all Trust policies Band 3 285 states that it is a tool for helping the Trust’s staff to consider the Band 4 86 potential impact that their services, projects, strategies and policies Band 5 350 might have on the community it serves from different equality Band 6 361 perspectives. Band 7 242 Band 8A 63 Band 8B 22 The general equality duty that is set out in the Equality Act 2010 Band 8C 5 requires public authorities, in the exercise of their functions, to have Band 8D 5 due regard to the need to: Personal 65 • eliminate unlawful discrimination, harassment and victimisation Associate Specialist Consultant 1 and other conduct prohibited by the act. Consultant 4 Medical Salaried GP 1 • advance equality of opportunity between people who share a Locally Agreed 10 protected characteristic and those who do not. • foster good relations between people who share a protected characteristic and those who do not. Staff policies applied during the financial year
The general equality duty does not specify how public authorities Policies applied during the year to give full and fair consideration to should analyse the effect of their existing and new policies and disabled staff members. practices on equality, but doing so is an important part of complying
with the general equality duty. It is up to each organisation to The Trust recognises and embraces its roles and responsibilities to choose the most effective approach for them. This standard give full and fair consideration to applications for employment by disabled persons. Following the principles of the Equality Delivery
Page 55 of 68 Lincolnshire Community Health Services NHS Trust | Annual Report and Accounts 2019/20 template is designed to help LCHS staff members to comply with The Trade Union (Facility Time Publication Requirements) the general duty. Regulations 2017 (“the Facility Time Regulations”) came into force on 1 April 2017 requiring relevant public sector employers to The Trust has an ongoing commitment to the training needs of its publish specified information on an annual basis covering the 12 staff to support both their personal and professional development. A month period beginning with 1 April. training needs analysis is completed on an annual basis by the organisation, in order to identify its professional development This is the second relevant period and runs from 1 April 2018 to 31 needs. These organisational needs are further supported by March 2019 and the information must be published on the Trust individual annual performance reviews (appraisals) that identifies website. personal development plans. As indicated above, all policies are subjected to the equality analysis including the education, training The schedule of tables below shows the information the Trust is and development policy. required to publish.
Specific policies applied during the year to ensure full and fair Facility time is the time off taken by a union official that is permitted consideration to disabled staff include: by the Trust, in order to carry out trade union duties or activities (but not including partnership duties). • recruitment and selection policy • promoting equality valuing diversity protecting human rights • The number of employees who are union officials policy • The percentage of their working hours spent on trade union • education training and development policy facility time • The percentage of the pay bill spent on facility time Trade union facility time reporting requirements • The percentage spent on paid trade union activities as a percentage of the total paid facility time hours. There is a requirement for relevant public sector organisations to publish information in relation to trade union facility time.
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Schedule of Information Table 3 Percentage of pay bill spent on facility time Table 1 Relevant union officials Provide the figures requested in the first column of the table below What was the total number of your employees who were relevant to determine the percentage of your total pay bill spent on paying union officials during the relevant period? employees who were relevant union officials for facility time during Number of employees who were relevant Full-time equivalent the relevant period. union officials during the relevant period employee number First Column Figures 6 1.32 wte Provide the total cost of facility time (not including £14,092.92 partnership working) £63,250,624.64 Table 2 Percentage of time spent on facility time (not Provide the total pay bill including partnership working) Provide the percentage of the total pay bill spent on 0.022% facility time, calculated as: (total cost of facility time ÷ How many of your employees who were relevant union officials total pay bill) x 100 employed during the relevant period spent a) 0%, b) 1%-50%, c) 51%-99% or d) 100% of their working hours on facility time? Table 4 Paid trade union activities
As a percentage of total paid facility time hours, how many hours Percentage of time Number of employees were spent by employees who were relevant union officials during 0% the relevant period on paid trade union activities? 1-10% 11-20% 1 Time spent on paid trade union activities as a percentage of total 21-30% 1 paid facility time hours calculated as: (total hours spent on paid 57% 31-40% 1 trade union activities by relevant union officials during the relevant 41-50% period ÷ total paid facility time hours) x 100 51-60%
61-70% 1 *Based on data as at 31st March 2019 71-80% 1 81-90% 91-100% 1
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Employee matters • The difference between the median hourly rate of pay for male Gender pay gap report and female employees • The proportions of male and female employees in the four New regulations took effect on 31 March 2017 (The Equality Act quartile pay bands (lower, lower middle, upper middle and 2010 Specific Duties and Public Authorities Regulations 2017) that upper) requires all public sector organisations in England employing 250 or more staff to publish gender pay gap (GPG) information. The above measures are calculated using a ‘snapshot date’ and for public sector organisations this is the pay period which includes 31 The gender pay gap shows the difference between the average March 2019. This statement therefore covers all LCHS employees (mean or median) earnings of all male and female employees. It is including those on Bank contracts as reported at 31 March 2019. expressed as a percentage of earnings and it is a measure of The data is taken from the Electronic Staff Record (ESR). disadvantage. The gender pay gap is not the same as equal pay. Equal pay is about ensuring men and women doing similar work or The Trust is required to publish this information within one year of work that is different but of equal value (in terms of skills, the snapshot date (i.e. by 31 March 2020) and by the same date responsibility, effort are paid the same. A gender pay gap could every subsequent year. It should be published on a website that is reflect a failure to provide equal pay but it usually reflects a range of accessible to employees and the public. The data also has to be factors, including a concentration of women in lower paid roles and uploaded on the governments ‘Gender Pay Service’ reporting site. women being less likely to reach senior management levels. Workforce context Lincolnshire Community Health Services (LCHS) is required to The gender split within the overall workforce is 89.8% female and publish the below gender pay gap measures: 10.2% male at LCHS based on data reported at 31 March 2019. Figure 1 below breaks this down by the proportion of males and • The difference between the mean hourly rate of pay for male females in each pay band. and female employees
Page 58 of 68 Lincolnshire Community Health Services NHS Trust | Annual Report and Accounts 2019/20
Figure 1 the NHS national job evaluation framework to determine Gender Female Female Male Male Total Total appropriate pay bandings. This provides a clear process of paying Pay Band Count Percentage Coun Percentage Count Percentage employees equally for the same or equivalent work. Pay t progression is also linked to performance. Band 1 16 0.9% 2 0.1% 18 1.0%
Band 2 314 17.7% 23 1.3% 337 19.0% Figure 1 outlines that women are represented across all pay bands Band 3 257 14.5% 24 1.4% 281 15.9% Band 4 76 4.3% 10 0.6% 86 4.9% within LCHS and there is a 2:2 ratio of females to males in very Band 5 336 19.0% 17 1.0% 353 19.9% senior management (VSM) posts. Band 6 311 17.6% 41 2.3% 352 19.9% Band 7 175 9.9% 38 2.1% 213 12.0% The highest proportion of females is concentrated within Band 2, 5 Band 8a 46 2.6% 19 1.1% 65 3.7% and 6 posts and the highest proportion of males are concentrated 20 1.1% 7 0.4% 27 Band 8b 1.5% within Band 6 and Band 7 posts. The occupancy of these different Band 8c 3 0.2% 1 0.1% 4 0.2% posts by gender therefore contributes to the gender pay gap. Band 8d 2 0.1% 2 0.1% 4 0.2%
Medical 4 0.2% 11 0.6% 15 0.8% and Dental Please note with effect from 1 December 2018 band 1 was closed Other 10 0.6% 2 0.1% 12 0.7% to new entrants as part of the 2018 pay deal. VSM 2 0.1% 2 0.1% 4 0.2% Total 1,572 88.8% 199 11.2% 1,771 100.0% Mean and median hourly rate for males and females Figure 2a nb: figures may not sum exactly due to roundings Gender Average (Mean) Hourly Rate Median Hourly Rate
Male 20.05 17.10 *Please note the category entitled ‘other’ represents anyone who is Female 14.94 14.05 not on agenda for change pay bands, for example apprentices and Difference 5.11 3.05 staff groups who have TUPE transferred into the organisation. Pay Gap % 25.48% 17.86%
The LCHS workforce is governed under the NHS Agenda for The mean gender pay gap for LCHS is 25.48%. This means that Change, excluding medical staff and very senior managers. It uses men are paid 25.48% more than women on average. The average
Page 59 of 68 Lincolnshire Community Health Services NHS Trust | Annual Report and Accounts 2019/20 is calculated by adding up the hourly rates of all men and all women Figure 2b and dividing by the total number of men and women. Average Mean (Hourly Rate) Median Hourly Rate Pay Band Male Fem Differe Pay Male Female Difference Pay ale nce Gap The median gender pay gap for LCHS is 17.86%. This means Gap % % that when the hourly rates of all female and all male staff are put in Band 1 9.68 11.07 -1.39 -0.14 9.68 11.02 -1.34 -0.14 order from smallest to largest, the middle rate for men is 17.86% Band 2 11.13 10.41 0.72 0.06 11.34 9.72 1.62 0.14 higher than the middle rate for all female staff. Band 3 10.53 10.56 -0.03 0.00 10.14 10.46 -0.31 -0.03 Band 4 11.75 11.49 0.26 0.02 11.72 11.53 0.19 0.02 The mean gender pay gap has increased from 21.5% when Band 5 13.91 14.95 -1.04 -0.07 14.34 15.14 -0.80 -0.06 compared to 2018 snapshot; however the median gender pay gap Band 6 17.41 17.46 -0.05 0.00 17.71 17.52 0.19 0.01 has decreased from 18.96% in 2018. The Trust has recently Band 7 21.59 21.56 0.02 0.00 22.01 22.01 0.00 0.00 Band 8a 24.54 24.11 0.43 0.02 24.45 23.90 0.54 0.02 recruited a male to a very senior management position, which was Band 8b 28.00 27.65 0.35 0.01 27.94 27.94 0.00 0.00 previously held by a female, and this has improved our ratio at very Band 8c 31.25 31.95 -0.70 -0.02 31.25 31.87 -0.62 -0.02 senior management level to 2:2 from 4 females to 1. The Trust has Band 8d 41.83 37.41 4.41 0.11 41.83 37.41 4.41 0.11 been recruiting to a new medical model and between April 2018 Medical 54.62 46.21 8.41 0.15 60.19 43.18 17.01 0.28 and March 2019 the Trust made the appointment of 4 male GPs. and This composition of male / female GPS will contribute to the Trust’s Dental* gender pay gap as they sit within the higher bandings. The Trust Other* 32.99 9.72 23.27 0.71 32.99 9.47 23.51 0.71 follows all equal opportunity recruitment practices and for very VSM* 64.35 51.89 12.46 0.19 64.35 51.89 12.46 0.19 senior management positions this is supported by the NHS East *It should be noted that these 3 categories are actually pay groups, Midland Leadership Academy. rather than distinct pay bands and therefore the salaries of
individuals does vary significantly as there are different roles and Further analysis to show the gender pay gap per band is detailed in pay grades/structures within each of these groups. This accounts Figure 2b. for the wide pay gap % in these areas.
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The majority of staff in ‘other’ relates to individuals who have TUPE The proportions of male and female employees in each transferred and this includes GP practices containing a number of quartile of the pay distribution admin staff, one male Doctor Research Lead and then domiciliary The quartiles shown below in figure 3 are calculated by determining staff who are support staff. This has caused the wide pay gap in the hourly rate of pay and then ranking the relevant employees in this area. order from the lowest to the highest. The calculation requires an employer to show the proportions of male and female full-pay in The average pay gap % between bands does vary with some four quartile pay bands, which is done by dividing the workforce into bands reporting a negative pay gap (ie bands 1, 3, 5 and 8c) and four equal parts; lower, middle, upper middle and upper quartile pay others a positive pay gap difference. Pay bands 3 and 5 contain bands. some of the highest % of females and these show that on an average pay gap basis females are paid more. The mean pay gap Figure 3 information again varies between bands with both negative and 1 410 32 92.76% 7.24% positive values. 2 406 37 91.64% 8.36%
3 395 43 90.18% 9.82% It can be seen that for pay bands 8a and 8c on both an average and mean basis females and males are more balanced and this is 4 361 87 80.58% 19.42% an improved position from last year. Those on pay bands 8d show that on both an average and mean basis men are paid higher than Figure 3 highlights that the Trust employs more men in the higher women (although it should be noted there is a small number of banding categories than women which has an impact on the individuals in these pay bands than the lower bands so this will also average hourly rate. LCHS has significantly less men employed affect the figures). when compared to women, however, of those employed a proportion are in either senior or specialist roles.
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Actions to reduce the gender pay gap The Trust is committed to ensuring an equitable workforce and will Whilst the Trust has excellent representation of females across all continue to work towards achieving the following actions in order to levels of the organisation and is predominantly female, this report reduce the gender pay gap. Please note a number of the actions shows that there are gender pay gaps which require the continued are ongoing following the last Gender Pay Gap Statement with the development of actions to close these gaps. The Trust has a addition of some newly identified areas: dedicated Equality and Diversity Lead who monitors the Trust’s system to ensure legislative compliance, supporting staff around all To continue employing and monitoring recruitment, performance equality areas. and appraisal processes to ensure they are objective with structured and measured criteria that can be evidenced. The Trust LCHS can demonstrate that we are an equal opportunity employer undertakes annual appraisal audits to ensure a fair and equitable through policies and processes which support staff to make process is followed for all staff members; decisions, for example policies which support maternity, paternity • Continue to explore how we can attract more men into the and adoption leave, flexible working and disability leave. LCHS organisation at the lower bands, to create a more even gender takes a proactive stance regarding progression and development of balance; talent within the organisation with a formal and transparent • The Trust will robustly evaluate starting salaries of all staff appraisal process in place which links to performance related pay members to ensure they are commensurable with the increases in accordance with Agenda for Change. From the point of individual’s experience; identifying a vacancy, there is a clear pathway for development • The continuation of promoting flexible working opportunities for through our talent pipeline, fully in line with our equal opportunities both men and women (The Trust has made easily accessible on policy. its Intranet site information for all employees in relation to
applying for these opportunities); The Trust continues to offer Where staff are not employed on nationally agreed pay scales, the leadership development programmes which are accessible to Trust has developed a structured pay scale for GP salaries which male and female employees equally and will continue to takes account of experience and skills. encourage engagement of staff members;
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• Continue to monitor any shifts in the gender pay gap data each (Equality, Diversity and Inclusion, Health and Wellbeing, year to identify any trends and analyse underlying causes. Quality of Appraisal, Quality of Care, Safety Culture, Staff Engagement) average in three themes (Morale, Safe Environment – Bullying and Harassment, Team Working) and NHS Staff Survey results below average in two themes (Immediate Managers, Safe Environment – Violence).
Service line Percentage Overall 71% Chief Executive’s Office 94% Community Hospitals 68%
Community Nursing 54% The results from the national NHS Staff Survey are gauged against Director of Operations 83% the other 15 community trusts and where applicable, results from Finance and Business 98% previous years. Intelligence Operations Management 100% • LCHS had a response rate of 71% against a target of 70%. People and Innovation 95% This is a 16% increase on 2018 (55%) and 13% higher than Specialist Services 71% the average response rate for community trusts of 58%. Therapy Services 78%
Transitional Care and Flow 80% • The overall staff engagement score was 7.3, which is the Urgent Care 60% same as in 2018, compared with the average for community
trusts 7.2. The Trust was above average in six themes;
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Page 64 of 68 Lincolnshire Community Health Services NHS Trust | Annual Report and Accounts 2019/20
• Of the 11 themes from 2018, LCHS improved in three noticeable sustained improvements with a significant reduction in (Equality, Diversity and Inclusion, Health and Wellbeing, Safe the injuries, especially in the area of diabetes management which Environment – Bullying and Harassment), stayed the same in was the key area of concern. three (Immediate Managers, Quality of Appraisals, Staff Engagement), declined in four (Morale, Quality of Care, Safe Electricity was an emerging theme with three injuries to staff Environment – Violence, Safety Culture) and scored ‘average’ (mostly low harm) resulting from electric shock from portable in the new theme of Team Working. electrical appliances. The health and safety advisor and infection control staff undertook an audit and as a result the Estates Shared • Whilst Community Nursing and Urgent Care increased their Service Team has taken on its own electrical testing contractor to response rates, their scores have declined in most themes improve portable appliance testing and the health and safety since last year. advisor is currently rolling out electrical awareness and visual checks training for all inpatient care staff. Health and safety at work The accident figures for 2019/20 were remarkably similar to There were 116 patient injuries reported that were almost all no or 2018/19; with the exception of the last quarter where the Covid19 low harm. This was up on the 87 last year due to an increase in pandemic caused considerable change in how services were falls in the third quarter. There was no directly attributable cause for delivered and resulted in a reduction of staff accidents by a third. this. The majority of incidents by far are slips, trips and falls and Consequently there were 117 staff health and safety related work continues to assess patients and implement control measures incidents reported (129 last year), and again, by far the majority as patients come into LCHS’s care. resulted in no or low harm. The risk of NHS Property Services (NHSPS) failing to maintain “Needlestick” injuries (a needlestick injury is the penetration of the critical infrastructure in its premises and so exposing LCHS as a skin by a needle or other sharp object, which has been in contact tenant to risk was highlighted through routine monitoring by the with blood, tissue or other body fluids before the exposure) were shared service estate compliance officer and the Trust health and targeted by a special project team. The efforts of the team saw safety advisor with regard to water quality and ventilation plant.
Page 65 of 68 Lincolnshire Community Health Services NHS Trust | Annual Report and Accounts 2019/20
These issues were addressed through an emergency action and very senior managers. The Trust has two locally agreed pay groups. There was some disruption to service but no patients or scales; one for GPs and one recently agreed for associate staff were harmed. specialists. There are also a number of individuals who have joined LCHS via the Transfer of Undertakings (Protection of Employment) NHSPS has been challenged to improve its planned preventative regulations across from a different organisation that are also on maintenance and the Trust is working with them to address the previous local pay scales. issues. For the majority of staff who are on the Agenda for Change pay The fire compartmentation improvements that NHSPS made to scales, LCHS follows the nationally agreed job matching and hospital inpatient wards last year proved invaluable in the Covid-19 evaluation scheme to determine the band of the post. For medical pandemic. The Trust can be assured that the fire compartmentation and dental roles these follow the nationally agreed job descriptions. protecting those seriously ill patients was to the highest standard. The second phase of fire compartmentation work in the hospitals, to Expenditure on consultancy survey and improve compartmentation in none inpatient areas is ongoing. In 2019/20, the Trust spent £152k on consultancy expenditure. Key projects which engaged consultancy support included: The NHSPS work to provide a new Life 1 standard fire alarm system throughout County Hospital Louth is finally nearing • Supporting the Lincolnshire Stroke “100 days” cross-system conclusion. This has been a difficult and protracted task. It provides pathway review a significant improvement in fire detection and warning across the • Cross system IT projects on developing integrated care whole of the hospital site. records
Pay policy LCHS’ pay policy is based on national terms and conditions for the majority of staff including Agenda for Change, medical and dental
Page 66 of 68 Lincolnshire Community Health Services NHS Trust | Annual Report and Accounts 2019/20
Off-payroll engagements Exit packages
Off-payroll engagements as of 31 March 2020, for staff earnings Number of Number of other Total number more than £245 per day and that last longer than six months: compulsory departures of exit redundancies agreed packages
Number Number Number • In respect of off-payroll engagements, the Trust utilises Exit package cost independent medical contractors, generally General band (including any Practitioners in the delivery of its Out of Hours and Urgent special payment Care Services. element) <£10,000 - 10 10 Number £10,000 - £25,000 - - - Number of existing arrangements as of 31 March 2020 106 £25,001 - 50,000 - - - Of which, the number that have existed: £50,001 - £100,000 - - - For less than 1 year at the time of reporting 15 £100,001 - £150,000 - - - For between 1 and 2 years at the time of reporting 11 £150,001 - £200,000 - - - For between 2 and 3 years at the time of reporting 7 >£200,000 - - - For between 3 and 4 years at the time of reporting 12 Total number of exit - 10 10 packages by type For 4 or more years at the time of reporting 61 Total cost (£) £0 £29,000 £29,000
Page 67 of 68 Financial Statements 2019/20
Lincolnshire Community Health Services NHS Trust
Annual accounts for the year ended 31 March 2020
Further copies available on request from: Director of Finance and Business Intelligence Lincolnshire Community Health Services NHS Trust Beech House Waterside South Lincoln LN5 7JH www.lincolnshirecommunityhealthservices.nhs.uk
Page 1 Title Statement of the Chief Executive’s responsibilities as the Accountable Officer of the trust
The Chief Executive of NHS Improvement, in exercise of powers conferred on the NHS Trust Development Authority, has designated that the Chief Executive should be the Accountable Officer of the trust. The relevant responsibilities of Accountable Officers are set out in the NHS Trust Accountable Officer Memorandum. These include ensuring that:
· there are effective management systems in place to safeguard public funds and assets and assist in the implementation of corporate governance;
· value for money is achieved from the resources available to the trust;
· the expenditure and income of the trust has been applied to the purposes intended by Parliament and conform to the authorities which govern them;
· effective and sound financial management systems are in place; and
· annual statutory accounts are prepared in a format directed by the Secretary of State to give a true and fair view of the state of affairs as at the end of the financial year and the income and expenditure, other items of comprehensive income and cash flows for the year.
As far as I am aware, there is no relevant audit information of which the trust’s auditors are unaware, and I have taken all the steps that I ought to have taken to make myself aware of any relevant audit information and to establish that the entity’s auditors are aware of that information.
To the best of my knowledge and belief, I have properly discharged the responsibilities set out in my letter of appointment as an Accountable Officer.
Signed......
Maz Fosh, Chief Executive Officer
Date: 9th June 2020
Page 2 CEO AO Statement of Directors’ responsibilities in respect of the accounts
The directors are required under the National Health Service Act 2006 to prepare accounts for each financial year. The Secretary of State, with the approval of HM Treasury, directs that these accounts give a true and fair view of the state of affairs of the trust and of the income and expenditure, other items of comprehensive income and cash flows for the year. In preparing those accounts, the directors are required to:
· apply on a consistent basis accounting policies laid down by the Secretary of State with the approval of the Treasury; · make judgements and estimates which are reasonable and prudent;
· state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the accounts and; · prepare the financial statements on a going concern basis and disclose any material uncertainties over going concern. The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the trust and to enable them to ensure that the accounts comply with requirements outlined in the above mentioned direction of the Secretary of State. They are also responsible for safeguarding the assets of the trust and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The directors confirm to the best of their knowledge and belief they have complied with the above requirements in preparing the accounts.
The directors confirm that the annual report and accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for patients, regulators and stakeholders to assess the NHS trust’s performance, business model and strategy
By order of the Board
Signed:......
Maz Fosh, Chief Executive Officer
Date: 9th June 2020
Signed: ......
Sam Wilde, Director of Finance and Business Intelligence
Date: 9th June 2020
Page 3 SoD Resp
INDEPENDENT AUDITOR’S REPORT TO THE BOARD OF DIRECTORS OF LINCOLNSHIRE COMMUNITY HEALTH SERVICES NHS TRUST REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS Opinion We have audited the financial statements of Lincolnshire Community Health Services NHS Trust (“the Trust”) for the year ended 31 March 2020 which comprise the Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Taxpayers Equity and Statement of Cash Flows, and the related notes, including the accounting policies in note 1. In our opinion the financial statements:
• give a true and fair view of the state of the Trust’s affairs as at 31 March 2020 and of its income and expenditure for the year then ended; and
• have been properly prepared in accordance with the accounting policies directed by the Secretary of State with the consent of the Treasury as being relevant to NHS Trusts in England and included in the Department of Health and Social Care Group Accounting Manual 2019/20.
Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities are described below. We have fulfilled our ethical responsibilities under, and are independent of the Trust in accordance with, UK ethical requirements including the FRC Ethical Standard. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion.
Going concern The Directors have prepared the financial statements on the going concern basis as they have not been informed by the relevant national body of the intention to dissolve the Trust without the transfer of its services to another public sector entity. They have also concluded that there are no material uncertainties that could have cast significant doubt over its ability to continue as a going concern for at least a year from the date of approval of the financial statements (“the going concern period”). We are required to report to you if we have concluded that the use of the going concern basis of accounting is inappropriate or there is an undisclosed material uncertainty that may cast significant doubt over the use of that basis for a period of at least a year from the date of approval of the financial statements. In our evaluation of the Director’s conclusions we considered the inherent risks to the Trust’s operations and analysed how these risks might affect the Trust’s financial resources, or ability to continue its operations over the going concern period. We have nothing to report in these respects. However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the absence of reference to a material uncertainty in this auditor's report is not a guarantee that the Trust will continue in operation.
Other information in the Annual Report The Accountable Officer is responsible for the other information presented in the Annual Report together with the financial statements. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except as explicitly stated below, any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether, based on our financial statements audit work, the information therein is materially misstated or inconsistent with the financial statements or our audit knowledge. Based solely on that work we have not identified material misstatements in the other information. In our opinion the other
Page 4 Audit I
information included in the Annual Report for the financial year is consistent with the financial statements.
Annual Governance Statement We are required to report to you if the Annual Governance Statement has not been prepared in accordance with the requirements of the Department of Health and Social Care Group Accounting Manual 2019/20. We have nothing to report in this respect. Remuneration and Staff Report In our opinion the parts of the Remuneration and Staff Report subject to audit have been properly prepared in accordance with the Department of Health and Social Care Group Accounting Manual 2019/20.
Directors’ and Accountable Officer’s responsibilities As explained more fully in the statement set out on page 3, the directors are responsible for the preparation of financial statements that give a true and fair view. They are also responsible for: such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error; assessing the Trust’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and using the going concern basis of accounting unless they have been informed by the relevant national body of the intention to dissolve the Trust without the transfer of its services to another public sector entity. As explained more fully in the statement of the Chief Executive's responsibilities, as the Accountable Officer of the Trust, on Page 2 the Accountable Officer is responsible for ensuring that annual statutory accounts are prepared in a format directed by the Secretary of State.
Auditor’s responsibilities Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue our opinion in an auditor’s report. Reasonable assurance is a high level of assurance, but does not guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements. A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities. REPORT ON OTHER LEGAL AND REGULATORY MATTERS Report on the Trust’s arrangements for securing economy, efficiency and effectiveness in its use of resources Under the Code of Audit Practice we are required to report to you if the Trust has not made proper arrangement for securing economy, efficiency and effectiveness in its use of resources. We have nothing to report in this respect.
Respective responsibilities in respect of our review of arrangements for securing economy, efficiency and effectiveness in the use of resources As explained in the statement set out on page 41, the Chief Executive, as the Accountable Officer, is responsible for ensuring that value for money is achieved from the resources available to the Trust. We are required under section 21(3)(c), as amended by schedule 13 paragraph 10(a), of the Local Audit and Accountability Act 2014 to be satisfied that the Trust has made proper arrangements for securing economy, efficiency and effectiveness in its use of resources. We are not required to consider, nor have we considered, whether all aspects of the Trust’s arrangements for securing economy, efficiency and effectiveness in the use of resources are operating effectively.
Page 5 Audit II
We have undertaken our review in accordance with the Code of Audit Practice, having regard to the specified criterion issued by the Comptroller and Auditor General (C&AG) in December 2019 and updated in April 2020 as to whether the Trust had proper arrangements to ensure it took properly informed decisions and deployed resources to achieve planned and sustainable outcomes for taxpayers and local people. We planned our work in accordance with the Code of Audit Practice and related guidance. Based on our risk assessment, we undertook such work as we considered necessary.
Statutory reporting matters We are required by Schedule 2 to the Code of Audit Practice issued by the Comptroller and Auditor General (‘the Code of Audit Practice’) to report to you if:
• we refer a matter to the Secretary of State under section 30 of the Local Audit and Accountability Act 2014 because we have reason to believe that the Trust, or an officer of the Trust, is about to make, or has made, a decision which involves or would involve the body incurring unlawful expenditure, or is about to take, or has begun to take a course of action which, if followed to its conclusion, would be unlawful and likely to cause a loss or deficiency; or
• we issue a report in the public interest under section 24 of the Local Audit and Accountability Act 2014; or
• we make a written recommendation to the Trust under section 24 of the Local Audit and Accountability Act 2014. We have nothing to report in these respects.
THE PURPOSE OF OUR AUDIT WORK AND TO WHOM WE OWE OUR RESPONSIBILITIES This report is made solely to the Board of Directors of Lincolnshire Community Health Services NHS Trust, as a body, in accordance with Part 5 of the Local Audit and Accountability Act 2014. Our audit work has been undertaken so that we might state to the Board of the Trust, as a body, those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Board of the Trust, as a body, for our audit work, for this report or for the opinions we have formed.
CERTIFICATE OF COMPLETION OF THE AUDIT We certify that we have completed the audit of the accounts of Lincolnshire Community Health Services NHS Trust for the year ended 31 March 2020 in accordance with the requirements of the Local Audit and Accountability Act 2014 and the Code of Audit Practice.
Andrew Cardoza for and on behalf of KPMG LLP Chartered Accountants One Snowhill Snow Hill Queensway Birmingham B4 6GH
24 June 2020
Page 6 Audit III
Statement of Comprehensive Income 2019/20 2018/19 Note £000 £000 Operating income from patient care activities 3 98,026 89,717 Other operating income 4 10,321 12,500 Operating expenses 7, 9 (105,208) (97,529) Operating surplus/(deficit) from continuing operations 3,139 4,688
Finance income 12 180 133 Finance expenses 13 - - PDC dividends payable - - Net finance costs 180 133 Other gains / (losses) 14 (2) - Surplus / (deficit) for the year from continuing operations 3,317 4,821 Surplus / (deficit) on discontinued operations and the gain / (loss) on disposal of discontinued operations - - Surplus / (deficit) for the year 3,317 4,821
Other comprehensive income
Will not be reclassified to income and expenditure: Impairments 8 - (9) Revaluations 19 21 208 Other recognised gains and losses - - Other reserve movements - - Total comprehensive income / (expense) for the period 3,338 5,020
The accompanying notes form part of these financial statements
Page 7 SoCI Statement of Financial Position 31 March 31 March 2020 2019 Note £000 £000 Non-current assets Intangible assets 16 428 431 Property, plant and equipment 17 6,525 6,002 Other assets - - Total non-current assets 6,953 6,433 Current assets Inventories - - Receivables 25 6,844 7,255 Other investments / financial assets 22 - - Other assets - - Non-current assets for sale and assets in disposal groups - - Cash and cash equivalents 28 29,532 24,968 Total current assets 36,376 32,223 Current liabilities Trade and other payables 29 (12,901) (11,140) Borrowings 31 - - Provisions 34 (2,869) (2,496) Other liabilities 30 (740) (907) Liabilities in disposal groups - - Total current liabilities (16,510) (14,543) Total assets less current liabilities 26,819 24,113 Non-current liabilities Trade and other payables 29 - - Borrowings 31 - - Provisions 34 (275) (450) Other liabilities 30 - - Total non-current liabilities (275) (450) Total assets employed 26,544 23,663
Financed by Public dividend capital 63 520 Revaluation reserve 1,094 1,095 Other reserves - - Income and expenditure reserve 25,387 22,048 Total taxpayers' equity 26,544 23,663
The notes on pages 11 to 45 form part of these accounts.
Name ……………………………………………….
Maz Fosh Position Chief Executive Officer, Lincolnshire Community Health Services NHS Trust Date 9 June 2020
Page 8 SoFP Statement of Changes in Equity for the year ended 31 March 2020
Public Income and Revaluation dividend expenditure Total reserve capital reserve £000 £000 £000 £000 Taxpayers' and others' equity at 1 April 2019 - brought forward 520 1,095 22,048 23,663 Surplus/(deficit) for the year - - 3,317 3,317 Transfers by absorption: transfers between reserves - - - - Transfer from revaluation reserve to income and expenditure reserve for impairments arising from consumption of economic benefits - - - - Other transfers between reserves - (22) 22 - Impairments - - - - Revaluations - 21 - 21 Transfer to retained earnings on disposal of assets - - - - Other recognised gains and losses - - - - Public dividend capital received 30 - - 30 Public dividend capital repaid (487) - - (487) Other reserve movements - - - - Taxpayers' and others' equity at 31 March 2020 63 1,094 25,387 26,544
Statement of Changes in Equity for the year ended 31 March 2019
Public Income and Revaluation dividend expenditure Total reserve capital reserve £000 £000 £000 £000 Taxpayers' and others' equity at 1 April 2018 - brought forward 381 910 17,213 18,504 Prior period adjustment - - - - Taxpayers' and others' equity at 1 April 2018 - restated 381 910 17,213 18,504 Surplus/(deficit) for the year - - 4,821 4,821 Transfers by absorption: transfers between reserves - - - - Transfer from revaluation reserve to income and expenditure reserve for impairments arising from consumption of economic benefits - - - - Other transfers between reserves - (14) 14 - Impairments - (9) - (9) Revaluations - 208 - 208 Transfer to retained earnings on disposal of assets - - - - Other recognised gains and losses - - - - Public dividend capital received 139 - - 139 Public dividend capital repaid - - - - Other reserve movements - - - - Taxpayers' and others' equity at 31 March 2019 520 1,095 22,048 23,663
Information on reserves
Public dividend capital Public dividend capital (PDC) is a type of public sector equity finance based on the excess of assets over liabilities at the time of establishment of the predecessor NHS organisation. Additional PDC may also be issued to trusts by the Department of Health and Social Care. A charge, reflecting the cost of capital utilised by the trust, is payable to the Department of Health as the public dividend capital dividend.
Revaluation reserve Increases in asset values arising from revaluations are recognised in the revaluation reserve, except where, and to the extent that, they reverse impairments previously recognised in operating expenses, in which case they are recognised in operating income. Subsequent downward movements in asset valuations are charged to the revaluation reserve to the extent that a previous gain was recognised unless the downward movement represents a clear consumption of economic benefit or a reduction in service potential.
Income and expenditure reserve The balance of this reserve is the accumulated surpluses and deficits of the trust.
Page 9 SoCIE Statement of Cash Flows 2019/20 2018/19 Note £000 £000 Cash flows from operating activities Operating surplus / (deficit) - 3,139 4,688 Non-cash income and expense: Depreciation and amortisation 7.1 1,420 1,038 Net impairments 8 (3) (27) Income recognised in respect of capital donations 4 - (239) (Increase) / decrease in receivables and other assets 25 411 1,230 (Increase) / decrease in inventories - - Increase / (decrease) in payables and other liabilities 29/30 1,608 (971) Increase / (decrease) in provisions 198 (20) Tax (paid) / received - - Net cash flows from / (used in) operating activities 6,773 5,699 Cash flows from investing activities Interest received 12 180 133 Purchase and sale of financial assets / investments - - Purchase of intangible assets 16 (185) (97) Sales of intangible assets - - Purchase of property, plant, equipment and investment property 17 (1,747) (2,362) Sales of property, plant, equipment and investment property - - Receipt of cash donations to purchase assets - 196 Net cash flows from / (used in) investing activities (1,752) (2,130) Cash flows from financing activities Public dividend capital received - 30 139 Public dividend capital repaid - (487) - Movement on loans from Department of Health and Social Care - - Movement on other loans - - Other capital receipts - - Interest on loans - - PDC dividend (paid) / refunded - - Cash flows from (used in) other financing activities - - Net cash flows from / (used in) financing activities (457) 139 Increase / (decrease) in cash and cash equivalents 4,564 3,708 Cash and cash equivalents at 1 April - brought forward 24,968 21,260 Prior period adjustments - Cash and cash equivalents at 1 April - restated 24,968 21,260
Cash and cash equivalents transferred under absorption accounting - - Cash and cash equivalents at 31 March 28.1 29,532 24,968
The accompanying notes form part of these financial statements
Page 10 SoCF Notes to the Accounts Note 1 Accounting policies and other information Note 1.1 Basis of preparation The Department of Health and Social Care has directed that the financial statements of the Trust shall meet the accounting requirements of the Department of Health and Social Care Group Accounting Manual (GAM), which shall be agreed with HM Treasury. Consequently, the following financial statements have been prepared in accordance with the GAM 2019/20 issued by the Department of Health and Social Care. The accounting policies contained in the GAM follow International Financial Reporting Standards to the extent that they are meaningful and appropriate to the NHS, as determined by HM Treasury, which is advised by the Financial Reporting Advisory Board. Where the GAM permits a choice of accounting policy, the accounting policy that is judged to be most appropriate to the particular circumstances of the Trust for the purpose of giving a true and fair view has been selected. The particular policies adopted are described below. These have been applied consistently in dealing with items considered material in relation to the accounts.
Note 1.1.1 Accounting convention These accounts have been prepared under the historical cost convention modified to account for the revaluation of property, plant and equipment, intangible assets, inventories and certain financial assets and financial liabilities.
Note 1.2 Going concern Lincolnshire Community Health Services NHS Trust annual report and accounts have been prepared on a going concern basis. Nontrading entities in the public sector are assumed to be going concerns where the continued provision of a service in the future is anticipated, as evidenced by inclusion of financial provision for that service in published documents.
Note 1.3 Critical accounting judgements and key sources of estimation uncertainty In the application of Lincolnshire Community Health Services NHS Trust accounting policies, management is required to make various judgements, estimates and assumptions. These are regularly reviewed.
Note 1.3.1 Critical accounting judgements and key sources of estimation uncertainty In the application of Trust's accounting policies, management is required to make various judgements, estimates and assumptions. These are regularly reviewed.
Note 1.3.2 Sources of estimation uncertainty
The following are assumptions about the future and other major sources of estimation uncertainty that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year:
In the application of Lincolnshire Community Health Services NHS Trust's accounting policies, management is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from those estimates and the estimates and underlying assumptions are continually reviewed. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.
Note 1.4 Transfer of Functions As public sector bodies are deemed to operate under common control, business reconfigurations within the DHSC group are outside the scope of IFRS 3 Business Combinations. Where functions transfer between two public sector bodies, the GAM requires the application of ‘absorption accounting’. Absorption accounting requires that entities account for their transactions in the period in which they took place. Where assets and liabilities transfer, the gain or loss resulting is recognised in the Statement of Comprehensive Income, and is disclosed separately from operating costs
Note 1.5 Pooled Budgets Lincolnshire Community Health Services NHS Trust is party to a S75 agreement with Lincolnshire County Council and Lincolnshire Clinical Commissioning Groups (CCGs) with regards to the provision of transitional care nursing beds to the Lincolnshire patient population. Lincolnshire County Council is the host organisation and Lincolnshire Community Health Services NHS Trust contribution is detailed within note 2 to these accounts.
Note 1.6 Revenue from contracts with customers Where income is derived from contracts with customers, it is accounted for under IFRS 15. The GAM expands the definition of a contract to include legislation and regulations which enables an entity to receive cash or another financial asset that is not classified as a tax by the Office of National Statistics (ONS).
Revenue in respect of goods/services provided is recognised when (or as) performance obligations are satisfied by transferring promised goods/services to the customer and is measured at the amount of the transaction price allocated to those performance obligations. At the year end, the Trust accrues income relating to performance obligations satisfied in that year. Where the Trust’s entitlement to consideration for those goods or services is unconditional a contract receivable will be recognised. Where entitlement to consideration is conditional on a further factor other than the passage of time, a contract asset will be recognised. Where consideration received or receivable relates to a performance obligation that is to be satisfied in a future period, the income is deferred and recognised as a contract liability.
The main source of revenue for Lincolnshire Community Health Services NHS Trust is contracts with commissioners in respect of healthcare services. Revenue in respect of services provided is recognised when (or as) performance obligations are satisfied by transferring promised services to the customer, and is measured at the amount of the transaction price allocated to that performance obligation. At the year end, Trust accrues income relating to performance obligations satisfied in that year. Where a patient care spell is incomplete at the year end, revenue relating to the partially complete spell is accrued in the same manner as other revenue.
Where income is received for a specific performance obligation that is to be satisfied in the following year, that income is deferred.
The Trust receives income under the NHS Injury Cost Recovery Scheme, designed to reclaim the cost of treating injured individuals to whom personal injury compensation has subsequently been paid, for instance by an insurer.
The Trust recognises the income when it receives notification from the Department of Work and Pension's Compensation Recovery Unit, has completed the NHS2 form and confirmed there are no discrepancies with the treatment. The income is measured at the agreed tariff for the treatments provided to the injured individual, less a provision for unsuccessful compensation claims and doubtful debts in line with IFRS 9 requirements of measuring expected credit losses over the lifetime of the asset.
Income from the sale of non-current assets is recognised only when all material conditions of sale have been met, and is measured as the sums due under the sale contract.
Page 11 Acc'g policies I Note 1 Accounting policies and other information (continued) Revenue in respect of services provided is recognised when (or as) performance obligations are satisfied by transferring promised services to the customer, and is measured at the amount of the transaction price allocated to that performance obligation.
Payment terms are standard reflecting cross government principles. Significant terms include payment in line with the Better Payments Practice Code (BPPC).
The value of the benefit received when the Trust accesses funds from the Government’s apprenticeship service are recognised as income in accordance with IAS 20, Accounting for Government Grants. Where these funds are paid directly to an accredited training provider, non-cash income and a corresponding non-cash training expense are recognised, both equal to the cost of the training funded.
Revenue from NHS contracts
The main source of income for the Trust is contracts with commissioners for health care services. A performance obligation relating to delivery of a spell of health care is generally satisfied over time as healthcare is received and consumed simultaneously by the customer as the Trust performs it. The customer in such a contract is the commissioner, but the customer benefits as services are provided to their patient. Even where a contract could be broken down into separate performance obligations, healthcare generally aligns with paragraph 22(b) of the Standard entailing a delivery of a series of goods or services that are substantially the same and have a similar pattern of transfer. At the year end, the Trust accrues income relating to activity delivered in that year, where a patient care spell is incomplete. This accrual is disclosed as a contract receivable as entitlement to payment for work completed is usually only dependent on the passage of time.
Revenue from research contracts
Where research contracts fall under IFRS 15, revenue is recognised as and when performance obligations are satisfied. For some contracts, it is assessed that the revenue project constitutes one performance obligation over the course of the multi-year contract. In these cases it is assessed that the Trust’s interim performance does not create an asset with alternative use for the Trust, and the Trust has an enforceable right to payment for the performance completed to date. It is therefore considered that the performance obligation is satisfied over time, and the Trust recognises revenue each year over the course of the contract. Some research income alternatively falls within the provisions of IAS 20 for government grants.
NHS injury cost recovery scheme The Trust receives income under the NHS injury cost recovery scheme, designed to reclaim the cost of treating injured individuals to whom personal injury compensation has subsequently been paid, for instance by an insurer. The Trust recognises the income when performance obligations are satisfied. In practical terms this means that treatment has been given, it receives notification from the Department of Work and Pension's Compensation Recovery Unit, has completed the NHS2 form and confirmed there are no discrepancies with the treatment. The income is measured at the agreed tariff for the treatments provided to the injured individual, less an allowance for unsuccessful compensation claims and doubtful debts in line with IFRS 9 requirements of measuring expected credit losses over the lifetime of the asset.
Provider sustainability fund (PSF) and Financial recovery fund (FRF) The PSF and FRF enable providers to earn income linked to the achievement of financial controls and performance targets. Income earned from the funds is accounted for as variable consideration.
Note 1.6 Other forms of income
Grants and donations Government grants are grants from government bodies other than income from commissioners or trusts for the provision of services. Where a grant is used to fund revenue expenditure it is taken to the Statement of Comprehensive Income to match that expenditure. Where the grants is used to fund capital expenditure, it is credited to the consolidated statement of comprehensive income once conditions attached to the grant have been met. Donations are treated in the same way as government grants.
Apprenticeship service income The value of the benefit received when accessing funds from the Government's apprenticeship service is recognised as income at the point of receipt of the training service. Where these funds are paid directly to an accredited training provider from the Trust's Digital Apprenticeship Service (DAS) account held by the Department for Education, the corresponding notional expense is also recognised at the point of recognition for the benefit.
Note 1.7 Expenditure on employee benefits
Short-term employee benefits Salaries, wages and employment-related payments such as social security costs and the apprenticeship levy are recognised in the period in which the service is received from employees. The cost of annual leave entitlement earned but not taken by employees at the end of the period is recognised in the financial statements to the extent that employees are permitted to carry-forward leave into the following period.
Pension costs
NHS Pension Scheme
Past and present employees are covered by the provisions of the two NHS Pension Schemes. Both schemes are unfunded, defined benefit schemes that cover NHS employers, general practices and other bodies, allowed under the direction of Secretary of State for Health and Social Care in England and Wales. The scheme is not designed in a way that would enable employers to identify their share of the underlying scheme assets and liabilities. Therefore, the scheme is accounted for as though it is a defined contribution scheme: the cost to the trust is taken as equal to the employer's pension contributions payable to the scheme for the accounting period. The contributions are charged to operating expenses as and when they become due.
Additional pension liabilities arising from early retirements are not funded by the scheme except where the retirement is due to ill-health. The full amount of the liability for the additional costs is charged to the operating expenses at the time the trust commits itself to the retirement, regardless of the method of payment.
Note 1.8 Expenditure on other goods and services Expenditure on goods and services is recognised when, and to the extent that they have been received, and is measured at the fair value of those goods and services. Expenditure is recognised in operating expenses except where it results in the creation of a non-current asset such as property, plant and equipment.
Note 1.9 Discontinued operations Discontinued operations occur where activities either cease without transfer to another entity, or transfer to an entity outside of the boundary of Whole of Government Accounts, such as private or voluntary sectors. Such activities are accounted for in accordance with IFRS 5. Activities that are transferred to other bodies within the boundary of Whole of Government Accounts are ‘machinery of government changes’ and treated as continuing operations.
Note 1.10 Other Expenses Other operating expenses are recognised when, and to the extent that, the goods or services have been received. They are measured at the fair value of the consideration payable.
Page 12 Acc'g policies II # Note 1.11 Property, plant and equipment Recognition Property, plant and equipment is capitalised where:
• it is held for use in delivering services or for administrative purposes • it is probable that future economic benefits will flow to, or service potential be provided to, the trust • it is expected to be used for more than one financial year • the cost of the item can be measured reliably • the item has cost of at least £5,000, or • collectively, a number of items have a cost of at least £5,000 and individually have cost of more than £250, where the assets are functionally interdependent, had broadly simultaneous purchase dates, are anticipated to have similar disposal dates and are under single managerial control.
Where a large asset, for example a building, includes a number of components with significantly different asset lives, eg, plant and equipment, then these components are treated as separate assets and depreciated over their own useful lives.
Subsequent expenditure Subsequent expenditure relating to an item of property, plant and equipment is recognised as an increase in the carrying amount of the asset when it is probable that additional future economic benefits or service potential deriving from the cost incurred to replace a component of such item will flow to the enterprise and the cost of the item can be determined reliably. Where a component of an asset is replaced, the cost of the replacement is capitalised if it meets the criteria for recognition above. The carrying amount of the part replaced is de-recognised. Other expenditure that does not generate additional future economic benefits or service potential, such as repairs and maintenance, is charged to the Statement of Comprehensive Income in the period in which it is incurred.
Measurement Valuation All property, plant and equipment assets are measured initially at cost, representing the costs directly attributable to acquiring or constructing the asset and bringing it to the location and condition necessary for it to be capable of operating in the manner intended by management.
Assets are measured subsequently at valuation. Assets which are held for their service potential and are in use (ie operational assets used to deliver either front line services or back office functions) are measured at their current value in existing use. Assets that were most recently held for their service potential but are surplus with no plan to bring them back into use are measured at fair value where there are no restrictions on sale at the reporting date and where they do not meet the definitions of investment properties or assets held for sale.
Revaluations of property, plant and equipment are performed with sufficient regularity to ensure that carrying values are not materially different from those that would be determined at the end of the reporting period. Current values in existing use are determined as follows:
• Land and non-specialised buildings – market value for existing use • Specialised buildings – depreciated replacement cost on a modern equivalent asset basis. Properties in the course of construction for service or administration purposes are carried at cost, less any impairment loss. Cost includes professional fees and, where capitalised in accordance with IAS 23, borrowings costs. Assets are revalued and depreciation commences when the assets are brought into use.
IT equipment, transport equipment, furniture and fittings, and plant and machinery that are held for operational use are valued at depreciated historic cost where these assets have short useful lives or low values or both, as this is not considered to be materially different from current value in existing use.
Depreciation
Items of property, plant and equipment are depreciated over their remaining useful lives in a manner consistent with the consumption of economic or service delivery benefits. Revaluation gains and losses
Revaluation gains are recognised in the revaluation reserve, except where, and to the extent that, they reverse a revaluation decrease that has previously been recognised in operating expenses, in which case they are recognised in operating expenditure.
Revaluation losses are charged to the revaluation reserve to the extent that there is an available balance for the asset concerned, and thereafter are charged to operating expenses.
Gains and losses recognised in the revaluation reserve are reported in the Statement of Comprehensive Income as an item of ‘other comprehensive income’.
Impairments In accordance with the GAM, impairments that arise from a clear consumption of economic benefits or of service potential in the asset are charged to operating expenses. A compensating transfer is made from the revaluation reserve to the income and expenditure reserve of an amount equal to the lower of (i) the impairment charged to operating expenses; and (ii) the balance in the revaluation reserve attributable to that asset before the impairment.
An impairment that arises from a clear consumption of economic benefit or of service potential is reversed when, and to the extent that, the circumstances that gave rise to the loss is reversed. Reversals are recognised in operating expenditure to the extent that the asset is restored to the carrying amount it would have had if the impairment had never been recognised. Any remaining reversal is recognised in the revaluation reserve. Where, at the time of the original impairment, a transfer was made from the revaluation reserve to the income and expenditure reserve, an amount is transferred back to the revaluation reserve when the impairment reversal is recognised.
Other impairments are treated as revaluation losses. Reversals of ‘other impairments’ are treated as revaluation gains.
De-recognition
Assets intended for disposal are reclassified as ‘held for sale’ once all of the following criteria are met. The sale must be highly probable and the asset available for immediate sale in its present condition. Following reclassification, the assets are measured at the lower of their existing carrying amount and their ‘fair value less costs to sell’. Depreciation ceases to be charged. Assets are de-recognised when all material sale contract conditions have been met.
Property, plant and equipment which is to be scrapped or demolished does not qualify for recognition as ‘held for sale’ and instead is retained as an operational asset and the asset’s useful life is adjusted. The asset is de-recognised when scrapping or demolition occurs.
Donated and grant funded assets Donated and grant funded property, plant and equipment assets are capitalised at their fair value on receipt. The donation/grant is credited to income at the same time, unless the donor has imposed a condition that the future economic benefits embodied in the grant are to be consumed in a manner specified by the donor, in which case, the donation/grant is deferred within liabilities and is carried forward to future financial years to the extent that the condition has not yet been met.
The donated and grant funded assets are subsequently accounted for in the same manner as other items of property, plant and equipment.
Page 13 Acc'g policies III Note 1 Accounting policies and other information (continued) Private Finance Initiative (PFI) and Local Improvement Finance Trust (LIFT) transactions PFI and NHS LIFT transactions which meet the IFRIC 12 definition of a service concession, as interpreted in HM Treasury’s FReM , are accounted for as ‘on-Statement of Financial Position’ by the trust. In accordance with HM Treasury’s FReM, the underlying assets are recognised as property, plant and equipment, together with an equivalent liability. Subsequently, the assets are accounted for as property, plant and equipment and/or intangible assets as appropriate.
The annual contract payments are apportioned between the repayment of the liability, a finance cost, the charges for services and lifecycle replacement of components of the asset.
The service charge is recognised in operating expenses and the finance cost is charged to finance costs in the Statement of Comprehensive Income.
Lincolnshire Community Health Services NHS Trust has not entered into any arrangements involving PFI or LIFT transactions.
Useful lives of property, plant and equipment
Useful lives reflect the total life of an asset and not the remaining life of an asset. The range of useful lives are shown in the table below: Min life Max life Years Years Land - - Buildings, excluding dwellings 1 26 Dwellings - - Plant & machinery 1 5 Transport equipment - - Information technology 1 4 Furniture & fittings 1 4
Finance-leased assets (including land) are depreciated over the shorter of the useful life or the lease term, unless the trust expects to acquire the asset at the end of the lease term in which case the assets are depreciated in the same manner as owned assets above.
# Note 1.12 Intangible assets Recognition Intangible assets are non-monetary assets without physical substance which are capable of being sold separately from the rest of the trust’s business or which arise from contractual or other legal rights. They are recognised only where it is probable that future economic benefits will flow to, or service potential be provided to, the trust and where the cost of the asset can be measured reliably. Expenditure on research is not capitalised: it is recognised as an operating expense in the period in which it is incurred. Internally-generated assets are Expenditure on development is capitalised only where all of the following can be demonstrated: ● the technical feasibility of completing the intangible asset so that it will be available for use ● the intention to complete the intangible asset and use it ● the ability to sell or use the intangible asset ● how the intangible asset will generate probable future economic benefits or service potential ● the availability of adequate technical, financial and other resources to complete the intangible asset and sell or use ● the ability to measure reliably the expenditure attributable to the intangible asset during its development
Software
Software which is integral to the operation of hardware, eg an operating system, is capitalised as part of the relevant item of property, plant and equipment. Software which is not integral to the operation of hardware, eg application software, is capitalised as an intangible asset.
Measurement Intangible assets are recognised initially at cost, comprising all directly attributable costs needed to create, produce and prepare the asset to the point that it Subsequently intangible assets are measured at current value in existing use. Where no active market exists, intangible assets are valued at the lower of depreciated replacement cost and the value in use where the asset is income generating. Revaluations gains and losses and impairments are treated in the same manner as for property, plant and equipment. An intangible asset which is surplus with no plan to bring it back into use is valued at fair value where there are no restrictions on sale at the reporting date and where they do not meet the definitions of investment properties or assets held for sale.
Intangible assets held for sale are measured at the lower of their carrying amount or fair value less costs to sell.
Amortisation
Intangible assets are amortised over their expected useful lives in a manner consistent with the consumption of economic or service delivery benefits.
Useful lives of intangible assets
Useful lives reflect the total life of an asset and not the remaining life of an asset. The range of useful lives are shown in the table below: Min life Max life Years Years
Information technology 1 4 Development expenditure - - Websites - - Software licences 1 4 Licences & trademarks - - Patents - - Other (purchased) - - Goodwill - -
# Note 1.13 Inventories The Trust does not hold a material level of inventories. No value for inventories is included on the Statement of Financial Position.
# Note 1.14 Cash and cash equivalents Cash is cash in hand and deposits with any financial institution repayable without penalty on notice of not more than 24 hours. Cash equivalents are investments that mature in 3 months or less from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
In the Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and that form an integral part of the Trust’s cash management. Cash, bank and overdraft balances are recorded at current values.
Page 14 Acc'g policies IV Note 1 Accounting policies and other information (continued) # Note 1.15 Financial assets and financial liabilities
Recognition Financial assets and financial liabilities arise where the Trust is party to the contractual provisions of a financial instrument, and as a result has a legal right to receive or a legal obligation to pay cash or another financial instrument. The GAM expands the definition of a contract to include legislation and regulations which give rise to arrangements that in all other respects would be a financial instrument and do not give rise to transactions classified as a tax by ONS.
This includes the purchase or sale of non-financial items (such as goods or services), which are entered into in accordance with the Trust’s normal purchase, sale or usage requirements and are recognised when, and to the extent which, performance occurs, ie, when receipt or delivery of the goods or services is made.
Classification and measurement Financial assets and financial liabilities are initially measured at fair value plus or minus directly attributable transaction costs except where the asset or liability is not measured at fair value through income and expenditure. Fair value is taken as the transaction price, or otherwise determined by reference to quoted market prices or valuation techniques. Financial assets or financial liabilities in respect of assets acquired or disposed of through finance leases are recognised and measured in accordance with the accounting policy for leases described below.
Financial assets and financial liabilities at amortised cost Financial assets and financial liabilities at amortised cost are those held with the objective of collecting contractual cash flows and where cash flows are solely payments of principal and interest. This includes cash equivalents, contract and other receivables, trade and other payables, rights and obligations under lease arrangements and loans receivable and payable.
After initial recognition, these financial assets and financial liabilities are measured at amortised cost using the effective interest method less any impairment (for financial assets). The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial asset or financial liability to the gross carrying amount of a financial asset or to the amortised cost of a financial liability. Interest revenue or expense is calculated by applying the effective interest rate to the gross carrying amount of a financial asset or amortised cost of a financial liability and recognised in the Statement of Comprehensive Income and a financing income or expense. In the case of loans held from the Department of Health and Social Care, the effective interest rate is the nominal rate of interest charged on the loan.
Financial assets measured at fair value through other comprehensive income A financial asset is measured at fair value through other comprehensive income where business model objectives are met by both collecting contractual cash flows and selling financial assets and where the cash flows are solely payments of principal and interest. Movements in the fair value of financial assets in this category are recognised as gains or losses in other comprehensive income except for impairment losses. On derecognition, cumulative gains and losses previously recognised in other comprehensive income are reclassified from equity to income and expenditure, except where the Trust elected to measure an equity instrument in this category on initial recognition.
Financial assets and financial liabilities at fair value through income and expenditure Financial assets measured at fair value through profit or loss are those that are not otherwise measured at amortised cost or at fair value through other comprehensive income. This category also includes financial assets and liabilities acquired principally for the purpose of selling in the short term (held for trading) and derivatives. Derivatives which are embedded in other contracts, but which are separable from the host contract are measured within this category. Movements in the fair value of financial assets and liabilities in this category are recognised as gains or losses in the Statement of Comprehensive income.
Impairment of financial assets For all financial assets measured at amortised cost including lease receivables, contract receivables and contract assets or assets measured at fair value through other comprehensive income, the Trust recognises an allowance for expected credit losses. The Trust adopts the simplified approach to impairment for contract and other receivables, contract assets and lease receivables, measuring expected losses as at an amount equal to lifetime expected losses. For other financial assets, the loss allowance is initially measured at an amount equal to 12-month expected credit losses (stage 1) and subsequently at an amount equal to lifetime expected credit losses if the credit risk assessed for the financial asset significantly increases (stage 2). For financial assets that have become credit impaired since initial recognition (stage 3), expected credit losses at the reporting date are measured as the difference between the asset’s gross carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate. Expected losses are charged to operating expenditure within the Statement of Comprehensive Income and reduce the net carrying value of the financial asset in the Statement of Financial Position.
Derecognition Financial assets are de-recognised when the contractual rights to receive cash flows from the assets have expired or the Trust has transferred substantially all the risks and rewards of ownership. Financial liabilities are de-recognised when the obligation is discharged, cancelled or expires.
# Note 1.16 Leases Leases are classified as finance leases when substantially all the risks and rewards of ownership are transferred to the lessee. All other leases are classified as operating leases.
Note 1.16.1 Lincolnshire Community Health Services NHS Trust as lessee Property, plant and equipment held under finance leases are initially recognised, at the commencement of the lease, at fair value or, if lower, at the present value of the minimum lease payments, with a matching liability for the lease obligation to the lessor. Lease payments are apportioned between finance charges and reduction of the lease obligation to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised in the Statement of Comprehensive Income.
Operating lease payments are recognised as an expense on a straight-line basis over the lease term. Lease incentives are recognised initially as a liability and subsequently as a reduction of rentals on a straight-line basis over the lease term. Contingent rentals are recognised as an expense in the period in which they are incurred. Where a lease is for land and buildings, the land and building components are separated and individually assessed as to whether they are operating or finance leases.
Note 1.16.2 Lincolnshire Community Health Services NHS Trust as lessor Amounts due from lessees under finance leases are recorded as receivables at the amount of Trust’s net investment in the leases. Finance lease income is allocated to accounting periods to reflect a constant periodic rate of return on Trust’s net investment outstanding in respect of the leases.
Rental income from operating leases is recognised on a straight-line basis over the term of the lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased
Page 15 Acc'g policies V # Note 1.17 Provisions
The Trust recognises a provision where it has a present legal or constructive obligation of uncertain timing or amount; for which it is probable that there will be a future outflow of cash or other resources; and a reliable estimate can be made of the amount. The amount recognised in the Statement of Financial Position is the best estimate of the resources required to settle the obligation. Where the effect of the time value of money is significant, the estimated risk-adjusted cash flows are discounted using HM Treasury's discount rates effective for 31 March 2020:
Nominal rate Short-term Up to 5 years 0.51% Medium-term After 5 years up to 10 years 0.55% Long-term Exceeding 10 years 1.99%
HM Treasury provides discount rates for general provisions on a nominal rate basis. Expected future cash flows are therefore adjusted for the impact of inflation before discounting using nominal rates. The following inflation rates are set by HM Treasury, effective 31 March 2020: Inflation rate Year 1 1.90% Year 2 2.00% Into perpetuity 2.00%
Early retirement provisions and injury benefit provisions both use the HM Treasury's pension discount rate of minus 0.5% in real terms.
Clinical negligence costs
NHS Resolution operates a risk pooling scheme under which the trust pays an annual contribution to NHS Resolution, which, in return, settles all clinical negligence claims. Although NHS Resolution is administratively responsible for all clinical negligence cases, the legal liability remains with the Trust. The total value of clinical negligence provisions carried by NHS Resolution on behalf of the trust is disclosed at note 34.2 but is not recognised in the Trust’s accounts.
Non Clinical Risk Pooling
The Trust participates in the Property Expenses Scheme and the Liabilities to Third Parties Scheme. Both are risk pooling schemes under which the Trust pays an annual contribution to the NHS Litigation Authority and, in return, receives assistance with the costs of claims arising. The annual membership contributions, and any excesses payable in respect of particular claims are charged to operating expenses as and when they become due.
# Note 1.18 Contingencies
Contingent assets (that is, assets arising from past events whose existence will only be confirmed by one or more future events not wholly within the entity’s control) are not recognised as assets, but are disclosed in note 35 where an inflow of economic benefits is probable. Contingent liabilities are not recognised, but are disclosed in note 35, unless the probability of a transfer of economic benefits is remote.
Contingent liabilities are defined as:
• possible obligations arising from past events whose existence will be confirmed only by the occurrence of one or more uncertain future events not wholly within the entity’s control; or
• present obligations arising from past events but for which it is not probable that a transfer of economic benefits will arise or for which the amount of the obligation cannot be measured with sufficient reliability.
# Note 1.19 Public dividend capital Public dividend capital (PDC) is a type of public sector equity finance based on the excess of assets over liabilities at the time of establishment of the predecessor NHS organisation. HM Treasury has determined that PDC is not a financial instrument within the meaning of IAS 32.
The Secretary of State can issue new PDC to, and require repayments of PDC from, the trust. PDC is recorded at the value received.
A charge, reflecting the cost of capital utilised by the trust, is payable as public dividend capital dividend. The charge is calculated at the rate set by HM Treasury (currently 3.5%) on the average relevant net assets of the trust during the financial year. Relevant net assets are calculated as the value of all assets less the value of all liabilities, except for (i) donated and grant funded assets, (ii) average daily cash balances held with the Government Banking Services (GBS) and National Loans Fund (NLF) deposits, excluding cash balances held in GBS accounts that relate to a short-term working capital facility, and (iii) any PDC dividend balance receivable or payable.
In accordance with the requirements laid down by the Department of Health and Social Care (as the issuer of PDC), the dividend for the year is calculated on the actual average relevant net assets as set out in the “pre-audit” version of the annual accounts. The dividend calculated is not revised should any adjustment to net assets occur as a result the audit of the annual accounts.
Page 16 Acc'g policies VI 19 Note 1 Accounting policies and other information (continued) 20 Note 1.20 Value added tax
Most of the activities of the trust are outside the scope of VAT and, in general, output tax does not apply and input tax on purchases is not recoverable. Irrecoverable VAT is charged to the relevant expenditure category or included in the capitalised purchase cost of fixed assets. Where output tax is charged or input VAT is recoverable, the amounts are stated net of VAT.
21 Note 1.21 Foreign exchange
Lincolnshire Community Health Services NHS Trust's functional currency and presentational currency is pounds sterling, and figures are presented in thousands of pounds unless expressly stated otherwise. Transactions denominated in a foreign currency are translated into sterling at the spot exchange rate on the date of the transaction. At the end of the reporting period, monetary items denominated in foreign currencies are retranslated at the spot exchange rate on 31 March. Exchange gains and losses on monetary items (arising on settlement of the transaction or on retranslation at the Statement of Financial Position date) are recognised in the Statement of Comprehensive Income in the period in which they arise.
Lincolnshire Community Health Services NHS Trust has not undertaken any transactions involving foreign currency in the financial year.
22 Note 1.22 Third party assets
Assets belonging to third parties in which the Trust has no beneficial interest (such as money held on behalf of patients) are not recognised in the accounts. However, they are disclosed in a separate note to the accounts in accordance with the requirements of HM Treasury’s FReM .
23 Note 1.23 Losses and special payments Losses and special payments are items that Parliament would not have contemplated when it agreed funds for the health service or passed legislation. By their nature they are items that ideally should not arise. They are therefore subject to special control procedures compared with the generality of payments. They are divided into different categories, which govern the way that individual cases are handled. Losses and special payments are charged to the relevant functional headings in expenditure on an accruals basis.
The losses and special payments note is compiled directly from the losses and compensations register which reports on an accrual basis with the exception of provisions for future losses.
24 Note 1.24 Gifts
Gifts are items that are voluntarily donated, with no preconditions and without the expectation of any return. Gifts include all transactions economically equivalent to free and unremunerated transfers, such as the loan of an asset for its expected useful life, and the sale or lease of assets at below market value.
25 Note 1.25 Early adoption of standards, amendments and interpretations No new accounting standards or revisions to existing standards have been early adopted in 2019/20.
26 Note 1.26 Standards, amendments and interpretations in issue but not yet effective or adopted
IFRS 16 Leases IFRS 16 Leases will replace IAS 17 Leases, IFRIC 4 Determining whether an arrangement contains a lease and other interpretations and is applicable in the public sector for periods beginning 1 April 2021. The standard provides a single accounting model for lessees, recognising a right of use asset and obligation in the statement of financial position for most leases: some leases are exempt through application of practical expedients explained below. For those recognised in the statement of financial position the standard also requires the remeasurement of lease liabilities in specific circumstances after the commencement of the lease term. For lessors, the distinction between operating and finance leases will remain and the accounting will be largely unchanged.
IFRS 16 changes the definition of a lease compared to IAS 17 and IFRIC 4. The trust will apply this definition to new leases only and will grandfather its assessments made under the old standards of whether existing contracts contain a lease. On transition to IFRS 16 on 1 April 2021, the trust will apply the standard retrospectively with the cumulative effect of initially applying the standard recognised in the income and expenditure reserve at that date. For existing operating leases with a remaining lease term of more than 12 months and an underlying asset value of at least £5,000, a lease liability will be recognised equal to the value of remaining lease payments discounted on transition at the trust’s incremental borrowing rate. The trust’s incremental borrowing rate will be a rate defined by HM Treasury. Currently this rate is 1.27% but this may change between now and adoption of the standard. The related right of use asset will be measured equal to the lease liability adjusted for any prepaid or accrued lease payments. For existing peppercorn leases not classified as finance leases, a right of use asset will be measured at current value in existing use or fair value. The difference between the asset value and the calculated lease liability will be recognised in the income and expenditure reserve on transition. No adjustments will be made on 1 April 2021 for existing finance leases.
For leases commencing in 2021/22, the trust will not recognise a right of use asset or lease liability for short term leases (less than or equal to 12 months) or for leases of low value assets (less than £5,000). Right of use assets will be subsequently measured on a basis consistent with owned assets and depreciated over the length of the lease term.
HM Treasury revised the implementation date for IFRS 16 in the UK public sector to 1 April 2021 on 19 March 2020. Due to the need to reassess lease calculations, together with uncertainty on expected leasing activity in from April 2021 and beyond, a quantification of the expected impact of applying the standard in 2021/22 is currently impracticable. However, the trust does expect this standard to have a material impact on non-current assets, liabilities and depreciation.
Other standards, amendments and interpretations The DHSC GAM does not require the following IFRS Standards and Interpretations to be applied in 2019-20. These Standards are still subject to HM Treasury FReM adoption, with IFRS 16 now being for implementation in 2021-22 (see above), and the government implementation date for IFRS 17 still subject to HM Treasury consideration. IFRS 17 Insurance Contracts – Application required for accounting periods beginning on or after 1 January 2021, but not yet adopted by the FReM: early adoption is not therefore permitted.
27 Note 1.27 Critical judgements in applying accounting policies The Trust has made some judgements, apart from those involving estimations, in the process of applying Trust's accounting policies and that have the most significant effect on the amounts recognised in the financial statements.
The valuation exercise was carried out in March 2020 with a valuation date of 31 March 2020. In applying the Royal Institute of Chartered Surveyors (RICS) Valuation Global Standards 2020 (‘Red Book’), the valuer has declared a ‘material valuation uncertainty’ in the valuation report. This is on the basis of uncertainties in markets caused by COVID-19.
Within the 2019/20 valuation report, the valuer included an opinion that material uncertainty existed in the estimation of property values resultant from the uncertainty created by the Covid-19 pandemic declared on 11th March 2020. The valuations provided are therefore reported on the basis of 'material valuation uncertainty' as per VPS 3 and VPGA 10 of the RICS Red Book Global. The values in the report have been used to inform the measurement of property assets at valuation in these financial statements. With the valuer having declared this material valuation uncertainty, the valuer has continued to exercise professional judgement in providing the valuation and this remains the best information available to the Trust.
Page 17 Acc'g policies VII Note 2 Operating Segments
No segmental analysis is shown as the sole activity of Lincolnshire Community Health Services NHS Trust in 2019/20 was the provision of community health services for the people of Lincolnshire and surrounding areas
The "Chief Operating Decision Maker" is deemed to be the Trust Board of Directors. The Board receives high level financial reporting information and does not therefore review information or allocate resources in any way that could be perceived to represent operating segments. This is reviewed during the year by the Trust Board, dependent on the information required or requested by the Chief Operating Decision Maker.
The Trust has a grouping of customers, Lincolnshire Clinical Commissioning Groups from which more than 10% of its total revenue is derived for the provision of community health services.
Note 2a Pooled Budgets
From October 2016, Lincolnshire Community Health Services NHS Trust has participated in a pooled budget arrangement under Section 75 of the Health Act 2012 with Lincolnshire County Council and Lincolnshire Clinical Commissioning Groups (CCGs) for the provision of Transitional Care nursing beds. Lincolnshire County Council are the hosting body.
Lincolnshire Community Health Services NHS Trust's share of the income and expenditure handled by the pooled budget in the financial year were;
Page 18 Operating Segments 3 Note 3 Operating income from patient care activities All income from patient care activities relates to contract income recognised in line with accounting policy 1.6
3 Note 3.1 Income from patient care activities (by nature) 2019/20 2018/19 £000 £000 Community services Community services income from CCGs and NHS England 89,291 82,645 Income from other sources (e.g. local authorities) 5,681 5,736 Other services Private patient income - 5 Agenda for Change pay award central funding* 1,089 Additional pension contribution central funding** 2,793 Other clinical income 261 242 Total income from activities 98,026 89,717
*Additional costs of the Agenda for Change pay reform in 2018/19 received central funding. From 2019/20 this funding is incorporated into tariff for individual services.
**The employer contribution rate for NHS pensions increased from 14.3% to 20.6% (excluding administration charge) from 1 April 2019. For 2019/20, NHS providers continued to pay over contributions at the former rate with the additional amount being paid over by NHS England on providers' behalf. The full cost and related funding have been recognised in these accounts.
3 Note 3.2 Income from patient care activities (by source) 2019/20 2018/19 Income from patient care activities received from: £000 £000 NHS England 5,659 2,255 Clinical commissioning groups 86,460 80,390 Department of Health and Social Care - 1,089 Other NHS providers 43 188 NHS other - - Local authorities 5,639 5,548 Non-NHS: private patients - - Non-NHS: overseas patients (chargeable to patient) - 5 Injury cost recovery scheme 204 213 Non NHS: other 21 29 Total income from activities 98,026 89,717 Of which: Related to continuing operations 98,026 89,717 Related to discontinued operations - -
Page 19 Op Inc I Note 3.3 Overseas visitors (relating to patients charged directly by the provider) 2019/20 2018/19 £000 £000 Income recognised this year - 5 Cash payments received in-year - - Amounts added to provision for impairment of receivables - 5 Amounts written off in-year - -
Note 4 Other operating income 2019/20 2018/19
Contract Non-contract Contract Non-contract Total Total income income income income
£000 £000 £000 £000 £000 £000 Research and development 129 - 129 212 - 212 Education and training 730 158 888 767 123 890 Non-patient care services to other bodies 6,871 6,871 7,096 7,096 Provider sustainability fund (PSF) 2,001 2,001 3,618 3,618 Income in respect of employee benefits accounted on a gross basis 395 395 406 406 Receipt of capital grants and donations - - 239 239 Charitable and other contributions to expenditure 35 35 35 35 Other income 2 - 2 4 - 4 Total other operating income 10,128 193 10,321 12,103 397 12,500 Of which: Related to continuing operations 10,321 12,500 Related to discontinued operations - -
Page 20 Op Inc II Note 5.1 Additional information on contract revenue (IFRS 15) recognised in the period 2019/20 2018/19 £000 £000 Revenue recognised in the reporting period that was included in within contract liabilities at the previous period end 810 210
Revenue recognised from performance obligations satisfied (or partially satisfied) in previous periods - -
Note 5.2 Transaction price allocated to remaining performance obligations 31 March 31 March Revenue from existing contracts allocated to remaining performance obligations is 2020 2019 expected to be recognised: £000 £000 within one year - - after one year, not later than five years - - after five years - - Total revenue allocated to remaining performance obligations - -
The trust has exercised the practical expedients permitted by IFRS 15 paragraph 121 in preparing this disclosure. Revenue from (i) contracts with an expected duration of one year or less and (ii) contracts where the trust recognises revenue directly corresponding to work done to date is not disclosed.
Note 6.1 Fees and charges HM Treasury requires disclosure of fees and charges income. The following disclosure is of income from charges to service users where income from that service exceeds £1 million and is presented as the aggregate of such income. The cost associated with the service that generated the income is also disclosed. 2019/20 2018/19 £000 £000 Income - - Full cost - - Surplus / (deficit) - -
Page 21 Op Inc III Note 7.1 Operating expenses 2019/20 2018/19 £000 £000 Staff and executive directors costs 69,339 63,251 Remuneration of non-executive directors 74 61 Supplies and services - clinical (excluding drugs costs) 11,486 11,097 Supplies and services - general 3,222 3,014 Drug costs (drugs inventory consumed and purchase of non-inventory drugs) 2,721 2,527 Consultancy costs 152 327 Establishment 880 685 Premises* 8,350 3,915 Transport (including patient travel) 1,699 2,005 Depreciation on property, plant and equipment 1,233 851 Amortisation on intangible assets 187 187 Net impairments (3) (27) Movement in credit loss allowance: contract receivables / contract assets (2) (8) Movement in credit loss allowance: all other receivables and investments - - Increase/(decrease) in other provisions - - Change in provisions discount rate(s) - - Audit fees payable to the external auditor audit services- statutory audit 44 43 other auditor remuneration (external auditor only) - - Internal audit costs 74 61 Clinical negligence 253 162 Legal fees 401 444 Insurance - - Research and development 60 77 Education and training 740 600 Rentals under operating leases* 4,288 7,980 Early retirements - - Redundancy - - Car parking & security - - Hospitality - - Losses, ex gratia & special payments - - Grossing up consortium arrangements - - Other services, eg external payroll - - Other 10 277 Total 105,208 97,529 Of which: Related to continuing operations 105,208 97,529 Related to discontinued operations - -
* During 2019/20, following further reviews with NHS Property Services Ltd., the value of minimum lease payments has reduced as the lease rental element is now only included. 2018/19 information included combined rental and service charges (utilities and running costs) as these could not be distinctly separated and were all shown within the 'Rentals under operating leases' category. In 2019/20, the service charges elements of cost are now classified within 'Premises costs'. This can also be seen within note 11.2, with a reduction in future operating lease commitments .
Page 22 Op Exp Note 7.2 Other auditor remuneration 2019/20 2018/19 £000 £000 Other auditor remuneration paid to the external auditor: 1. Audit of accounts of any associate of the trust - - 2. Audit-related assurance services - - 3. Taxation compliance services - - 4. All taxation advisory services not falling within item 3 above - - 5. Internal audit services - - 6. All assurance services not falling within items 1 to 5 - - 7. Corporate finance transaction services not falling within items 1 to 6 above - - 8. Other non-audit services not falling within items 2 to 7 above - - Total - -
Note 7.3 Limitation on auditor's liability
The limitation on auditor's liability for external audit work is £5m (2018/19: £5m).
Note 8 Impairment of assets 2019/20 2018/19 £000 £000 Net impairments charged to operating surplus / deficit resulting from: Loss or damage from normal operations - - Over specification of assets - - Abandonment of assets in course of construction - - Unforeseen obsolescence - - Loss as a result of catastrophe - - Changes in market price (3) (27) Other - - Total net impairments charged to operating surplus / deficit (3) (27) Impairments charged to the revaluation reserve - 9 Total net impairments (3) (18)
Page 23 Audit & Impairments Note 9 Employee benefits 2019/20 2018/19 Total Total £000 £000 Salaries and wages 49,479 47,440 Social security costs 4,707 4,516 Apprenticeship levy 236 226 Employer's contributions to NHS pensions 9,221 6,253 Pension cost - other 37 23 Other post employment benefits - - Other employment benefits - - Termination benefits - 286 Temporary staff (including agency) 5,659 4,507 Total gross staff costs 69,339 63,251 Recoveries in respect of seconded staff - - Total staff costs 69,339 63,251 Of which Costs capitalised as part of assets - -
Note 9.1 Retirements due to ill-health
During 2019/20 there was 1 early retirement from the trust agreed on the grounds of ill-health (1 in the year ended 31 March 2019). The estimated additional pension liabilities of these ill-health retirements is £143k (£52k in 2018/19).
These estimated costs are calculated on an average basis and will be borne by the NHS Pension Scheme.
Page 24 Employee Benefits Note 10 Pension costs
Past and present employees are covered by the provisions of the two NHS Pension Schemes. Details of the benefits payable and rules of the Schemes can be found on the NHS Pensions website at www.nhsbsa.nhs.uk/pensions. Both are unfunded defined benefit schemes that cover NHS employers, GP practices and other bodies, allowed under the direction of the Secretary of State for Health and Social Care in England and Wales. They are not designed to be run in a way that would enable NHS bodies to identify their share of the underlying scheme assets and liabilities. Therefore, each scheme is accounted for as if it were a defined contribution scheme: the cost to the NHS body of participating in each scheme is taken as equal to the contributions payable to that scheme for the accounting period.
In order that the defined benefit obligations recognised in the financial statements do not differ materially from those that would be determined at the reporting date by a formal actuarial valuation, the FReM requires that “the period between formal valuations shall be four years, with approximate assessments in intervening years”. An outline of these follows: a) Accounting valuation A valuation of scheme liability is carried out annually by the scheme actuary (currently the Government Actuary’s Department) as at the end of the reporting period. This utilises an actuarial assessment for the previous accounting period in conjunction with updated membership and financial data for the current reporting period, and is accepted as providing suitably robust figures for financial reporting purposes. The valuation of the scheme liability as at 31 March 2020, is based on valuation data as at 31 March 2019, updated to 31 March 2020 with summary global member and accounting data. In undertaking this actuarial assessment, the methodology prescribed in IAS 19, relevant FReM interpretations, and the discount rate prescribed by HM Treasury have also been used.
The latest assessment of the liabilities of the scheme is contained in the report of the scheme actuary, which forms part of the annual NHS Pension Scheme Accounts. These accounts can be viewed on the NHS Pensions website and are published annually. Copies can also be obtained from The Stationery Office. b) Full actuarial (funding) valuation The purpose of this valuation is to assess the level of liability in respect of the benefits due under the schemes (taking into account recent demographic experience), and to recommend contribution rates payable by employees and employers.
The latest actuarial valuation undertaken for the NHS Pension Scheme was completed as at 31 March 2016. The results of this valuation set the employer contribution rate payable from April 2019 to 20.6%, and the Scheme Regulations were amended accordingly.
The 2016 funding valuation was also expected to test the cost of the Scheme relative to the employer cost cap set following the 2012 valuation. Following a judgment from the Court of Appeal in December 2018 Government announced a pause to that part of the valuation process pending conclusion of the continuing legal process.
The Trust also has a small number of employees who pay into the National Employment Savings Trust (NEST) pension scheme and this is not connected to the NHS Pensions Scheme.
Page 25 Pension costs # Note 11 Operating leases
# Note11.1 Lincolnshire Community Health Services NHS Trust as a lessor Lincolnshire Community Health Services NHS Trust has not acted as a lessor in any leasing arrangements in 2019/20 (2018/19: £0)
# Note 11.2 Lincolnshire Community Health Services NHS Trust as a lessee This note discloses costs and commitments incurred in operating lease arrangements where Lincolnshire Community Health Services NHS Trust is the lessee.
Lincolnshire Community Health Services NHS Trust operates patient services in a variety of locations across the county of Lincolnshire and neighbouring counties. As a result, the Trust is party to a number of leasing arrangements for the occupation of properties. Many of these arrangements are with NHS Property Services Ltd.
The Trust also operates a lease car scheme to enable staff to deliver services in the community, these arrangements involve three-year leasing arrangements between the Trust and private leasing providers.
2019/20 2018/19 £000 £000 Operating lease expense Minimum lease payments* 4,288 7,980 Contingent rents - - Less sublease payments received - - Total 4,288 7,980
31 March 31 March 2020 2019 £000 £000 Future minimum lease payments due: - not later than one year; 3,854 6,858 - later than one year and not later than five years; 13,320 2,150 - later than five years. 28,413 2,156 Total 45,587 11,164 Future minimum sublease payments to be received - -
* During 2019/20, following further reviews with NHS Property Services Ltd., the value of minimum lease payments has reduced as the lease rental element is now only included. 2018/19 information included combined rental and service charges (utlitlies and running costs) as these could not be distinctly separated. This can also be seen with category movements in note 7.1 between 'Rentals Under Operating Leases' and 'Premises'.
In addition, as part of formalising arrangements with NHSPS in advance of IFRS16 adoption, the assumption for these lease lengths has increased from a previous rolling annual basis (1 year) to longer leaseholds (15 years). This is also reflected in the values presented above.
Page 26 Operating Leases Note 12 Finance income Finance income represents interest received on assets and investments in the period. 2019/20 2018/19 £000 £000 Interest on bank accounts 180 133 Interest income on finance leases - - Interest on other investments / financial assets - - Other finance income - - Total finance income 180 133
Bank interest represents interest on cash balances held within the Government Banking Service. LCHS is not permitted to hold balances with commercial banks.
Note 13.1 Finance expenditure Finance expenditure represents interest and other charges involved in the borrowing of money or asset financing. 2019/20 2018/19 £000 £000 Interest expense: Loans from the Department of Health and Social Care - - Other loans - - Overdrafts - - Finance leases - - Interest on late payment of commercial debt - - Main finance costs on PFI and LIFT schemes obligations - - Contingent finance costs on PFI and LIFT scheme obligations - - Total interest expense - - Unwinding of discount on provisions - - Other finance costs - - Total finance costs - -
Note 13.2 The late payment of commercial debts (interest) Act 1998 / Public Contract Regulations 2015 2019/20 2018/19 £000 £000 Total liability accruing in year under this legislation as a result of late payments - - Amounts included within interest payable arising from claims made under this legislation - - Compensation paid to cover debt recovery costs under this legislation - -
Note 14 Other gains / (losses) 2019/20 2018/19 £000 £000 Gains on disposal of assets - - Losses on disposal of assets (2) - Total gains / (losses) on disposal of assets (2) - Gains / (losses) on foreign exchange - - Fair value gains / (losses) on investment properties - - Fair value gains / (losses) on financial assets / investments - - Fair value gains / (losses) on financial liabilities - - Recycling gains / (losses) on disposal of financial assets mandated as fair value through OCI - - Other gains / (losses) - - Total other gains / (losses) (2) -
Note 15 Discontinued operations
Lincolnshire Community Health Services NHS Trust has none of its operations classified as discontinued in 2019/20 (2018/19; £nil)
Page 27 Finance & Other Note 16.1 Intangible assets - 2019/20 Internally generated Intangible Software information assets under Other licences technology construction (purchased) Total £000 £000 £000 £000 £000
Valuation / gross cost at 1 April 2019 - brought forward 886 198 - - 1,084 Transfers by absorption - - - - - Additions 100 85 - - 185 Impairments - - - - - Reversals of impairments - - - - - Revaluations - - - - - Reclassifications (16) 16 - - - Transfers to / from assets held for sale - - - - - Disposals / derecognition (47) - - - (47) Valuation / gross cost at 31 March 2020 923 299 - - 1,222
Amortisation at 1 April 2019 - brought forward 568 85 - - 653 Transfers by absorption - - - - - Provided during the year 137 50 - - 187 Impairments - - - - - Reversals of impairments - - - - - Revaluations - - - - - Reclassifications (47) 47 - - - Transfers to / from assets held for sale - - - - - Disposals / derecognition (46) - - - (46) Amortisation at 31 March 2020 612 182 - - 794
Net book value at 31 March 2020 311 117 - - 428 Net book value at 1 April 2019 318 113 - - 431
Note 16.2 Intangible assets - 2018/19 Internally generated Intangible Software information assets under Other licences technology construction (purchased) Total £000 £000 £000 £000 £000 Valuation / gross cost at 1 April 2018 - as previously stated 637 195 152 - 984 Prior period adjustments - - - - - Valuation / gross cost at 1 April 2018 - restated 637 195 152 - 984 Transfers by absorption - - - - - Additions 97 3 - - 100 Impairments - - - - - Reversals of impairments - - - - - Revaluations - - - - - Reclassifications 152 - (152) - - Transfers to / from assets held for sale - - - - - Disposals / derecognition - - - - - Valuation / gross cost at 31 March 2019 886 198 - - 1,084
Amortisation at 1 April 2018 - as previously stated 383 83 - - 466 Prior period adjustments - - - - - Amortisation at 1 April 2018 - restated 383 83 - - 466 Transfers by absorption - - - - - Provided during the year 185 2 - - 187 Impairments - - - - - Reversals of impairments - - - - - Revaluations - - - - - Reclassifications - - - - - Transfers to / from assets held for sale - - - - - Disposals / derecognition - - - - - Amortisation at 31 March 2019 568 85 - - 653
Net book value at 31 March 2019 318 113 - - 431 Net book value at 1 April 2018 254 112 152 - 518
Page 28 Intangibles Note 17.1 Property, plant and equipment - 2019/20
Buildings excluding Assets under Plant & Information Furniture & Land dwellings construction machinery technology fittings Total £000 £000 £000 £000 £000 £000 £000
Valuation/gross cost at 1 April 2019 - brought forward 681 3,045 362 2,402 3,684 519 10,693 Transfers by absorption ------Additions - 103 52 321 1,201 56 1,733 Impairments ------Reversals of impairments - (16) - - - - (16) Revaluations 10 (42) - - - - (32) Reclassifications - 353 (353) - - - - Transfers to / from assets held for sale ------Disposals / derecognition - - - - (501) - (501) Valuation/gross cost at 31 March 2020 691 3,443 61 2,723 4,384 575 11,877
Accumulated depreciation at 1 April 2019 - brought forward - 774 - 1,562 1,961 394 4,691 Transfers by absorption ------Provided during the year - 280 - 257 644 52 1,233 Impairments ------Reversals of impairments - (19) - - - - (19) Revaluations - (53) - - - - (53) Reclassifications ------Transfers to / from assets held for sale ------Disposals / derecognition - - - - (500) - (500)
Accumulated depreciation at 31 March 2020 - 982 - 1,819 2,105 446 5,352
Net book value at 31 March 2020 691 2,461 61 904 2,279 129 6,525 Net book value at 1 April 2019 681 2,271 362 840 1,723 125 6,002
Note 17.2 Property, plant and equipment - 2018/19 Buildings excluding Assets under Plant & Information Furniture & Land dwellings construction machinery technology fittings Total £000 £000 £000 £000 £000 £000 £000 Valuation / gross cost at 1 April 2018 - as previously stated 681 2,832 564 1,907 2,175 417 8,576 Prior period adjustments ------Valuation / gross cost at 1 April 2018 - restated 681 2,832 564 1,907 2,175 417 8,576 Transfers by absorption ------Additions - 66 360 425 1,086 75 2,012 Impairments - (32) - - - - (32) Reversals of impairments - (2) - - - - (2) Revaluations - 139 - - - - 139 Reclassifications - 42 (562) 70 423 27 - Transfers to / from assets held for sale ------Disposals / derecognition ------Valuation/gross cost at 31 March 2019 681 3,045 362 2,402 3,684 519 10,693
Accumulated depreciation at 1 April 2018 - as previously stated - 704 - 1,392 1,542 323 3,961 Prior period adjustments ------Accumulated depreciation at 1 April 2018 - restated - 704 - 1,392 1,542 323 3,961 Transfers by absorption ------Provided during the year - 191 - 170 419 71 851 Impairments - (22) - - - - (22) Reversals of impairments - (30) - - - - (30) Revaluations - (69) - - - - (69) Reclassifications ------Transfers to / from assets held for sale ------Disposals / derecognition ------Accumulated depreciation at 31 March 2019 - 774 - 1,562 1,961 394 4,691
Net book value at 31 March 2019 681 2,271 362 840 1,723 125 6,002 Net book value at 1 April 2018 681 2,128 564 515 633 94 4,615
Page 29 PPE I Note 17.3 Property, plant and equipment financing - 2019/20 Buildings Assets under Plant & Information Furniture & Land excluding Total construction machinery technology fittings dwellings £000 £000 £000 £000 £000 £000 £000 Net book value at 31 March 2020 Owned - purchased 691 2,308 61 868 2,277 122 6,327 Finance leased ------On-SoFP PFI contracts and other service concession arrangements ------Off-SoFP PFI residual interests ------Owned - government granted ------Owned - donated - 153 - 36 2 7 198 NBV total at 31 March 2020 691 2,461 61 904 2,279 129 6,525
Note 17.4 Property, plant and equipment financing - 2018/19
Buildings excluding Assets under Plant & Information Furniture & Land dwellings construction machinery technology fittings Total £000 £000 £000 £000 £000 £000 £000 Net book value at 31 March 2019 Owned - purchased 681 2,211 362 783 1,718 114 5,869 Finance leased ------On-SoFP PFI contracts and other service concession arrangements ------Off-SoFP PFI residual interests ------Owned - government granted ------Owned - donated - 60 - 57 5 11 133 NBV total at 31 March 2019 681 2,271 362 840 1,723 125 6,002
Page 30 PPE II Note 18 Donations of property, plant and equipment Lincolnshire Community Health Services NHS Trust received donated assets as detailed below: 2019/20 2018/19 £000 £000 Cash Donations (to fund PPE purchase) 0 196 Physical Assets Donated (non-cash) 0 40 0 236
Note 19 Revaluations of property, plant and equipment
A desktop revaluation exercise of the Trust owned property assets was undertaken during 2019/20 by DVS Property Specialist, an executive arm of the Valuation Office Agency, with an effective date of 31th March 2020. The valuations have been undertaken in accordance with International Financial Reporting Standards (IFRS) as interpreted and applied by the HM Treasury FReM compliant Department of Health and Social Care Group Accounting Manual (DHSC GAM).
Within the 2019/20 valuation report, the valuer included an opinion that material uncertainty existed in the estimation of property values resultant from the uncertainty created by the Covid-19 pandemic declared on 11th March 2020. The valuations provided are therefore reported on the basis of 'material valuation uncertainty' as per VPS 3 and VPGA 10 of the RICS Red Book Global. The values in the report have been used to inform the measurement of property assets at valuation in these financial statements. With the valuer having declared this material valuation uncertainty, the valuer has continued to exercise professional judgement in providing the valuation and this remains the best information available to the Trust.
Consequently, less certainty - and a higher degree of caution - should be attached to the valuation than would normally be the case. Given the unknown future economic impacts that Covid-19 might have on the real estate market, the Trust will keep the valuation of these properties under frequent review.
Note 20.1 Investment Property Lincolnshire Community Health Services NHS Trust does not hold any properties for the purposes of capital appreciation (investment)
Note 20.2 Investment property income and expenses Lincolnshire Community Health Services NHS Trust does not hold any properties for the purposes of capital appreciation (investment) and thus incurred no income or expenditure in relation to this (2019/20: £nil)
Page 31 PPE & Inv Prop Note 21 Investments in associates and joint ventures Lincolnshire Community Health Services NHS Trust does not hold any Investment in associates and joint ventures and thus incurred no income or expenditure in relation to this 2019/20 (2018/19: £nil)
Note 22 Other investments / financial assets (non-current)
Lincolnshire Community Health Services NHS Trust does not hold any Other Investments and thus incurred no income or expenditure in relation to this for 2019/20 (2018/19: £nil)
Note 22.1 Other investments / financial assets (current) Lincolnshire Community Health Services NHS Trust does not hold any Other Investments and thus incurred no income or expenditure in relation to this in 2019/20 (2018/19: £nil)
Note 23 Disclosure of interests in other entities
Lincolnshire Community Health Services NHS Trust holds no interests within other entities in 2019/20 (2018/19: nil)
Note 24 Inventories Inventories recognised in expenses for the year were £0k (2018/19: £0k). Write-down of inventories recognised as expenses for the year were £0k (2018/19: £0k).
Note 25.1 Receivables 31 March 31 March 2020 2019 £000 £000 Current Contract receivables 5,829 6,458 Contract assets - - Capital receivables - - Allowance for impaired contract receivables / assets (32) (34) Allowance for other impaired receivables - - Deposits and advances - - Prepayments (non-PFI) 742 798 Interest receivable - - VAT receivable 254 - Other receivables 51 33 Total current receivables 6,844 7,255
Non-current Contract receivables - - Contract assets - - Capital receivables - - Allowance for impaired contract receivables / assets - - Allowance for other impaired receivables - - Other receivables - - Total non-current receivables - -
Of which receivable from NHS and DHSC group bodies: Current 5,187 5,299 Non-current - -
Page 32 Receivables # Note 25.2 Allowances for credit losses 2019/20 2018/19 Contract Contract receivables All other receivables All other and contract receivables and contract receivables assets assets £000 £000 £000 £000 Allowances as at 1 April - brought forward 34 - - 42 Prior period adjustments - - Allowances as at 1 April - restated 34 - - 42 Impact of implementing IFRS 9 (and IFRS 15) on 1 April 2018 42 (42) Transfers by absorption - - - - New allowances arising 20 - (8) - Changes in existing allowances (7) - - - Reversals of allowances (15) - - - Utilisation of allowances (write offs) - - - - Changes arising following modification of contractual cash flows - - - - Allowances as at 31 Mar 2020 32 - 34 -
# Note 25.3 Exposure to credit risk As at 31 March 2020, Lincolnshire Community Health Services held outstanding receivable balances of £3163k which were primarily with other NHS organisations (2651k, 84%) and thus not deemed to be subject to significant credit risk. Balances with Non-NHS organisations (512k, 16%), were largely in expected payment terms (66%), remaining balances are included within provisions for credit losses (note 25.2 above)
# Note 26 Other assets Lincolnshire Community Health Services NHS Trust does not hold any Other Assets and thus incurred no income or expenditure in relation to this (2018/19: £nil)
# Note 27.1 Non-current assets held for sale and assets in disposal groups Lincolnshire Community Health Services NHS Trust does not hold any Non-current assets held for sale and assets in disposal groups and thus incurred no income or expenditure in relation to this (2018/19: £nil)
# Note 27.2 Liabilities in disposal groups
As at the end of 2019/20, the Trust held no liabilities classed in disposal groups (2018/19: £nil)
Page 33 Receivables II # Note 28.1 Cash and cash equivalents movements
Cash and cash equivalents comprise cash at bank, in hand and cash equivalents. Cash equivalents are readily convertible investments of known value which are subject to an insignificant risk of change in value.
2019/20 2018/19 £000 £000 At 1 April 24,968 21,260 Prior period adjustments - - At 1 April (restated) 24,968 21,260 Transfers by absorption - - Net change in year 4,564 3,708 At 31 March 29,532 24,968 Broken down into: Cash at commercial banks and in hand 1 1 Cash with the Government Banking Service 29,531 24,967 Deposits with the National Loan Fund - - Other current investments - - Total cash and cash equivalents as in SoFP 29,532 24,968 Bank overdrafts (GBS and commercial banks) - - Drawdown in committed facility - - Total cash and cash equivalents as in SoCF 29,532 24,968
# Note 28.2 Third party assets held by the trust
Lincolnshire Community Health Services NHS Trust held cash and cash equivalents which relate to monies held by the Trust on behalf of patients or other parties and in which the trust has no beneficial interest. This has been excluded from the cash and cash equivalents figure reported in the accounts.
31 March 31 March 2020 2019 £000 £000 Bank balances - - Monies on deposit - - Total third party assets - -
Page 34 Cash & Cash Eqv. Note 29.1 Trade and other payables 31 March 31 March 2020 2019 £000 £000 Current Trade payables 5,716 3,229 Capital payables 256 270 Accruals 4,848 5,544 Receipts in advance and payments on account - - Social security costs 723 681 VAT payables - 121 Other taxes payable 463 434 PDC dividend payable - - Other payables 895 861 Total current trade and other payables 12,901 11,140
Non-current Trade payables - - Capital payables - - Accruals - - Receipts in advance and payments on account - - VAT payables - - Other taxes payable - - Other payables - - Total non-current trade and other payables - -
Of which payables from NHS and DHSC group bodies: Current 6,505 3,152 Non-current - -
Note 29.2 Early retirements in NHS payables above The payables note above includes amounts in relation to early retirements as set out below:
31 March 31 March 31 March 31 March 2020 2020 2019 2019 £000 Number £000 Number - to buy out the liability for early retirements over 5 - years - - number of cases involved - -
Page 35 Payables Note 30 Other Financial liabilities 31 March 31 March 2020 2019 £000 £000 Current Deferred income: contract liabilities 740 907 Deferred grants - - Other deferred income - - Total other current liabilities 740 907
Non-current Deferred income: contract liabilities - - Deferred grants - - Other deferred income - - Total other non-current liabilities - -
Note 31.1 Borrowings Lincolnshire Community Health Services NHS Trust does not have or undertake any borrowing activities (overdrafts or loan arrangements) during 2019/20. (2018/19: £Nil)
Note 32.1 Reconciliation of liabilities arising from financing activities
Lincolnshire Community Health Services NHS Trust does not hold any liabilities arising from financing activities and thus no reconciliation table is included within the Trust accounts (2018/19: £Nil)
Note 33.1 Finance leases
Lincolnshire Community Health Services NHS Trust does not hold any finance leases and thus incurred no income or expenditure in relation to this (2018/19: £Nil)
Page 36 OL & Borrowings # Note 34.1 Provisions for liabilities and charges analysis
Pensions: early Pensions: Re- Legal claims Redundancy Other Total departure injury benefits structuring costs £000 £000 £000 £000 £000 £000 £000 At 1 April 2019 150 - 2,254 130 - 412 2,946 Transfers by absorption ------Change in the discount rate ------Arising during the year 8 - 372 - - 26 406 Utilised during the year (2) - (27) - - - (29) Reclassified to liabilities held in disposal groups ------Reversed unused (152) - (27) - - - (179) Unwinding of discount ------At 31 March 2020 4 - 2,572 130 - 438 3,144 Expected timing of cash flows: - not later than one year; - - 2,572 130 - 167 2,869 - later than one year and not later than five years; 4 - - - - 55 59 - later than five years. - - - - - 216 216 Total 4 - 2,572 130 - 438 3,144
Provisions included within the accounts of Lincolnshire Community Health Services NHS Trust as at 31 March 2020:
Pensions: these represent costs associated with departures where pension has been taken early as an alternative to ordinary termination. The Trust provides for the additional cost associated. Legal: the Trust has provided against ongoing legal cases which may incur settlement costs at a future date. Further information can be found at Note 35. Restructuring: are estimated costs relating to organisational restructuring and associated potential exit packages required. Other: provisions categorised here relate to provisions estimated associated with leased buildings and dilapidations clauses within these leases
# Note 34.2 Clinical negligence liabilities
At 31 March 2020, £801k was included in provisions of NHS Resolution in respect of clinical negligence liabilities of Lincolnshire Community Health Services NHS Trust (31 March 2019: £1,007k).
Page 37 Provisions # Note 35 Contingent assets and liabilities
During 2019/20, Lincolnshire Community Health Services NHS Trust has continued to engage in discussions with HM Revenue and Customs with regards to liabilities due in respect of pay-as-you-earn tax and national insurance. These liabilities relate to individuals engaged by the Trust in the delivery of its services (specifically the GP out-of-hours services), since the Trust’s inception in 2011
The arrangements were inherited from the Trust’s predecessor organisation (Lincolnshire Primary Care Trust). Discussions with HMRC to date have included explanation of the detail of the arrangement involved and complying with requests for additional information.
Depending on the outcome of this issue, there is a potential for a liability to arise. The Trust has included an estimate within its 2019/20 financial position as a provision (refer to note 34.1). The Trust continues to discuss with HMRC and legal advisors.
# Note 36 Contractual capital commitments 31 March 31 March 2020 2019 £000 £000 Property, plant and equipment 224 10 Intangible assets - - Total 224 10
# Note 37 Other financial commitments The trust is committed to making payments under non-cancellable contracts (which are not leases, PFI contracts or other service concession arrangement), analysed by the period during which the payment is made:
31 March 31 March 2020 2019 £000 £000 not later than 1 year - - after 1 year and not later than 5 years - - paid thereafter - - Total - -
# Note 38 On-SoFP PFI, LIFT or other service concession arrangements
Lincolnshire Community Health Services NHS Trust does not hold any On-SoFP PFI, LIFT or other service concessions and thus incurred no income or expenditure in relation to this (2018/19: £nil)
# Note 39 Off-SoFP PFI, LIFT and other service concession arrangements
Lincolnshire Community Health Services NHS Trust does not hold any On-SoFP PFI, LIFT or other service concessions and thus incurred no income or expenditure in relation to this (2018/19: £nil)
Page 38 C&O Note 40 Financial instruments
Note 40.1 Financial risk management
Financial reporting standard IFRS 7 requires disclosure of the role that financial instruments have had during the period in creating or changing the risks a body faces in undertaking its activities. Because of the continuing service provider relationship that the NHS Trust has with Clinical Commissioning Groups (CCGs) and the way those CCGs are financed, the NHS Trust is not exposed to the degree of financial risk faced by business entities. Also financial instruments play a much more limited role in creating or changing risk than would be typical of listed companies, to which the financial reporting standards mainly apply. Lincolnshire Community Health Services NHS Trust has limited powers to borrow or invest surplus funds and financial assets and liabilities are generated by day-to-day operational activities rather than being held to change the risks facing the Trust in undertaking its activities
The Trust’s treasury management operations are carried out by the finance department, within parameters defined formally within the Trust’s standing financial instructions and policies agreed by the board of directors. Lincolnshire Community Health Services NHS Trust treasury activity is subject to review by the Trust’s internal auditors.
Interest rate risk NHS Trusts are eligible to borrow from government for capital expenditure purposes, subject to affordability assessments as confirmed by NHS Improvement. The borrowings are for 1 – 25 years, in line with the life of the associated assets, and interest is charged at the National Loans Fund rate, fixed for the life of the loan. The Trust therefore has low exposure to interest rate fluctuations. Lincolnshire Community Health Services NHS Trust currently has no borrowings.
The Trust therefore has low exposure to interest rate fluctuations.
Credit risk
Because the majority of the Trust’s revenue comes from contracts with other public sector bodies, the Trust has low exposure to credit risk. The maximum exposures as at 31 March 2020 are in receivables from customers, as disclosed in the trade and other receivables note.
Liquidity risk The Trust’s operating costs are incurred under contracts with Clinical Commissioning Groups (CCGs), Local Authorities or NHS England, which are financed from resources voted annually by Parliament . The Trust funds its capital expenditure from funds obtained within its prudential borrowing limit. The Trust is not, therefore, exposed to significant liquidity risks.
Page 39 FI I Note 40.2 Carrying values of financial assets Held at Held at Held at Total amortised fair value fair value book value cost through I&E through OCI Carrying values of financial assets as at 31 March 2020 £000 £000 £000 £000 Trade and other receivables excluding non financial assets 5,763 - - 5,763 Other investments / financial assets - - - - Cash and cash equivalents 29,532 - - 29,532 Total at 31 March 2020 35,295 - - 35,295
Held at Held at Held at Total amortised fair value fair value book value cost through I&E through OCI Carrying values of financial assets as at 31 March 2019 £000 £000 £000 £000 Trade and other receivables excluding non financial assets 6,424 - - 6,424 Other investments / financial assets - - - - Cash and cash equivalents 24,968 - - 24,968 Total at 31 March 2019 31,392 - - 31,392
Note 40.3 Carrying values of financial liabilities Held at Held at Total amortised fair value book value cost through I&E Carrying values of financial liabilities as at 31 March 2020 £000 £000 £000
Loans from the Department of Health and Social Care - - - Obligations under finance leases - - - Obligations under PFI, LIFT and other service concession contracts - - - Other borrowings - - - Trade and other payables excluding non financial liabilities 10,820 - 10,820 Other financial liabilities - - - Provisions under contract - - - Total at 31 March 2020 10,820 - 10,820
Held at Held at Total amortised fair value book value cost through I&E Carrying values of financial liabilities as at 31 March 2019 £000 £000 £000
Loans from the Department of Health and Social Care - - - Obligations under finance leases - - - Obligations under PFI, LIFT and other service concession contracts - - - Other borrowings - - - Trade and other payables excluding non financial liabilities 9,041 - 9,041 Other financial liabilities - - - Provisions under contract - - - Total at 31 March 2019 9,041 - 9,041
Page 40 FI II # Note 40.4 Maturity of financial liabilities
31 March 31 March 2020 2019 £000 £000 In one year or less 10,820 9,041 In more than one year but not more than two years - - In more than two years but not more than five years - - In more than five years - - Total 10,820 9,041
# Note 40.5 Fair values of financial assets and liabilities
The majority of the Trust's financial assets relate either to cash or money due from other NHS organisations. Other NHS organisations are extremely unlikely to default on payments, and the Trust is only permitted to invest cash deposits within strict guidelines. Lincolnshire Community Health Services NHS Trust does not undertake any transactions involving hedging, foreign currency or other investments prone to market fluctuations. There is therefore, no material exposure to credit, market or liquidity risks.
The Trust's financial liabilities are generally of a short-term and uncomplicated nature which are not particularly influenced by external factors. The Trust updates a long term financial plan each year, which includes a detailed cash flow forecast, and has no reason to assume it will be unable to meet its obligations to suppliers, employees and financing costs. There are therefore not any material liquidity risks.
Page 41 FI III Note 41 Losses and special payments 2019/20 2018/19 Total Total Total value Total value number of number of of cases of cases cases cases Number £000 Number £000
Losses Cash losses 12 1 3 - Fruitless payments 1 - 1 11 Bad debts and claims abandoned 12 2 2 - Stores losses and damage to property - - - - Total losses 25 3 6 11 Special payments Compensation under court order or legally binding arbitration award 3 22 1 4 Extra-contractual payments - - 1 6 Ex-gratia payments 4 1 - - Special severance payments - - - - Extra-statutory and extra-regulatory payments - - - - Total special payments 7 23 2 10 Total losses and special payments 32 26 8 21 Compensation payments received - -
Note 42 Gifts Lincolnshire Community Health Services NHS Trust did not expend on gifts during 2019/20 (2018/19: £nil)
Page 42 L&SP & Gifts # Note 43 Related parties
Amounts Amounts Payments to Receipts from owed to due from Details of related party transactions with individuals are as follows: Related Party Related Party Related Related Party Party £ £ £ £ E Baylis, Chair, Lincolnshire Community Health Services NHS Trust 1. Chair, United Lincolnshire Hospitals NHS Trust 2,234,782 2,468,085 776,170 767,920
E Libiszewski, Non- Executive Director, Lincolnshire Community Health Services NHS Trust 1. Non Executive Director, United Lincolnshire Hospitals NHS Trust 2,234,782 2,468,085 776,170 767,920 2. Via Relation - St Barnabas Hospice - Registered Charity No: 1053814 1,940 32,007 720 -
S Ombler, Interim Director of Nursing and Operations (to 29/04/19), Lincolnshire Community Health Services NHS Trust 1.Via Relation- North East Lincolnshire Clinical Commissioning Group - 68,785 - 2,427
Dr Y Owen, Medical Director, Lincolnshire Community Health Services NHS Trust 1. Trustee - Lincolnshire Integrated Voluntary Emergency Service (LIVES) 12,475 - - - 2. East Lindsay Medical Group - GP Partner 17,685 1,170 - - 3. Private Contractor providing OOH GP provision in Trust Services 5,877 - - -
S Wilde, Director of Finance and Business Intelligence, Lincolnshire Community Health Services NHS Trust 1. Member of the HFMA Costing for Value Institute Council 2,400 - - -
The Department of Health is regarded as a related party. During the year 2019/20, the Trust has had a significant number of material transactions with the Department, and with other entities for which the Department is regarded as the parent Department. For example : - Clinical Commissioning Groups (primarily with NHS Lincolnshire East CCG, NHS Lincolnshire West CCG, NHS South West Lincolnshire CCG and NHS South Lincolnshire CCG) - NHS England (for the commissioning of specialised health services) - NHS Foundation Trusts (particularly North Lincolnshire and Goole NHS Foundation Trust and Lincolnshire Partnership NHS Foundation trust) - NHS Trusts (particularly with United Lincolnshire Hospitals NHS Trusts) # - NHS Resolution (in respect of Clinical Negligence contributions) - NHS Property Services (in respect of buildings, rentals and service charges) - NHS Business Services Authority In addition, the Trust has had a number of material transactions with other government departments and other central and local government bodies. Most of these transactions have been with Lincolnshire County Council in respect of services commissioned by the local authority. The Trust has also received revenue payments from a number of charitable funds, mainly from the Lincolnshire NHS Charity. Lincolnshire Community Health Services is the corporate trustee of the Lincolnshire NHS Charity. Lincolnshire NHS Charity is an independent and dedicated charity that plays a vital role in supporting both Lincolnshire Community Health Services NHS Trust and Lincolnshire Partnership Foundation NHS Trust to make a difference to service user care. # # Note 44 Events after the reporting date At the time of preparation, the Trust had not been notified or become aware of any significant events which require disclosure. During March 2020, Covid-19 was declared a pandemic on 12 March 2020 and the UK government made announcements about how the population should act as a result before the end of March 2020. These accounts include known costs incurred and reimbursed income resultant upto 31st March 2020.
As part of the NHS response and to enable focus upon supporting clinical delivery, standard inter-NHS contractual arrangements for 2020/21 were postponed and replaced with block payment arrangements based on 2019/20 in-year performance and monitoring.
Page 43 Rel Parties & EARP Note 45 Better Payment Practice code 2019/20 2019/20 2018/19 2018/19 Non-NHS Payables Number £000 Number £000 Total non-NHS trade invoices paid in the year 12,312 27,541 14,590 34,257 Total non-NHS trade invoices paid within target 10,107 22,987 11,502 28,278
Percentage of non-NHS trade invoices paid within target 82.1% 83.5% 78.8% 82.5%
NHS Payables Total NHS trade invoices paid in the year 1,239 10,809 1,450 15,456 Total NHS trade invoices paid within target 684 7,068 968 11,364
Percentage of NHS trade invoices paid within target 55.2% 65.4% 66.8% 73.5%
The Better Payment Practice code requires the NHS body to aim to pay all valid invoices by the due date or within 30 days of receipt of valid invoice, whichever is later.
Note 46 External financing limit The trust is given an external financing limit against which it is permitted to underspend 2019/20 2018/19 £000 £000 Cash flow financing (5,021) (3,569) Finance leases taken out in year - - Other capital receipts - - External financing requirement (5,021) (3,569) External financing limit (EFL) 949 3,115 Under / (over) spend against EFL 5,970 6,684
Note 47 Capital Resource Limit 2019/20 2018/19 £000 £000 Gross capital expenditure 1,918 2,112 Less: Disposals (2) - Less: Donated and granted capital additions - (239) Plus: Loss on disposal from capital grants in kind - - Charge against Capital Resource Limit 1,916 1,873
Capital Resource Limit 2,074 2,033 Under / (over) spend against CRL 158 160
Note 48 Breakeven duty financial performance 2019/20 £000 Adjusted financial performance surplus / (deficit) (control total basis) 3,410 Remove impairments scoring to Departmental Expenditure Limit - Add back income for impact of 2018/19 post-accounts PSF reallocation - Add back non-cash element of On-SoFP pension scheme charges - IFRIC 12 breakeven adjustment - Breakeven duty financial performance surplus / (deficit) 3,410
Page 44 CRL and breakeven duty # Note 49 Breakeven duty rolling assessment
2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 £000 £000 £000 £000 £000 £000 £000 £000 £000 Breakeven duty in-year financial performance 1,081 1,473 1,825 1,274 569 3,940 4,903 4,607 3,410 Breakeven duty cumulative position 1,081 2,554 4,379 5,653 6,222 10,162 15,065 19,672 23,082 Operating income 108,738 108,773 109,612 110,487 105,943 109,336 104,457 102,217 108,347 Cumulative breakeven position as a percentage of operating income 1.0% 2.3% 4.0% 5.1% 5.9% 9.3% 14.4% 19.2% 21.3%
Page 45 Breakeven duty II